Lethbridge feed barley’s spring rally muted

CNS Canada — Lethbridge feed barley should be seeing its largest premium over fall and winter months, but so far this year the market’s spring rally has been limited.

“This year all we’ve seen is a $5 to $10 per tonne move higher,” said Jim Beusekom, analyst at Market Place Commodities. “So it’s pretty minimal this year.”

Feed barley prices in Lethbridge are trading between $210 and $215 per tonne for shipment in May/June.

One reason for the lacklustre rally is mediocre demand from feedlots, said Jared Seitz, director at Agfinity Inc.

“There’s less usage than before, and maybe that is because some of the buyers are a little gun-shy from what happened last year,” Seitz said.

Since becoming comparatively less profitable, feeders don’t seem to be taking on as aggressive of an operation this year, he said.

Feedlots that need barley have already bought the grain they need for up until June, which is also stopping prices from gaining.

Feedlots are able to buy feed barley as they need it, Beusekom added.

“There just wasn’t really the difficultly moving grain this year that there normally is,” Seitz said.

Most shipments this year went as planned, he added, and few buyers were caught without grain.

There’s also more grain around this year, compared with year-ago levels, which is further keeping a lid on prices.

On-farm and commercial stocks of barley were at 3.813 million tonnes as of March 2016, compared with 3.402 million tonnes in March 2015, according to Statistics Canada data.

“There’s a little bit more barley than there was last year, demand is down, loading conditions have been good, so nothing that could work in the farmer’s favour,” Seitz said.

But on the upside, Beusekom said, dryness concerns across parts of the Prairies have allowed the market to hold steady, but haven’t provided enough support to allow the market to rally.

Seitz said those concerns will need to be amplified going into the summer to have any significant effect on prices.

“With that kind of set up there’s just really no chance for the market to rally,” he said.

Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

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