MarketsFarm — As more Canadian feed grains make their way overseas, especially into China, domestic buyers may need to pay more secure supplies from emptying bins over the next few months.
“Anything extra we’re able to export is getting exported at this point,” Brandon Motz, owner and sales manager of CorNine Commodities at Lacombe, Alta., said.
China is in the middle of rebuilding its hog herd after it was devastated by an African swine fever outbreak in 2018. In turn, Motz said, demand for feed from that nation has increased significantly.
“In essence, they’re stockpiling. (That’s) what’s going on. When you get a country like China that is not only trying to rebuild a hog herd, but trying to restock their inventory, that demand is going to increase at a very high pace,” he said.
Canadian barley exports are currently projected to total at least 3.7 million tonnes at the end of 2020-21, far exceeding previous years.
Motz expects current price trends to hold if China continues importing at its current pace. Stocks for various commodities are projected to be much tighter than at the end of previous crop years, he added.
“The buyers who don’t have coverage coming through the summer should probably look at getting coverage in some form and we just continue to encourage the sellers to sell into the rally,” he said.
“Barley stocks, as far as we can tell today, are going to be sub-one million (tonnes). Anytime you get below a million, in essence, you’re out of grain… Buyers need to be careful to make sure they have a little bit of security.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.