CNS Canada — Lethbridge’s feed barley market is sitting stagnant, as feedlots quit hand-to-mouth buying and farmers hold onto their grain.
Farmers who stored their feed barley post-harvest don’t want to sell at current prices, despite relative strength, said Jared Seitz, trade manager for Agfinity at Stony Plain, Alta.
“It’s not so much that prices aren’t good enough to sell,” he said. “It’s just getting back to the price that they could have got at harvest. It’s more of a mental disposition they have right now.”
He pegged Lethbridge feed barley prices at $207 a tonne, as the market has been propped up by reduced farmer selling.
Feed barley could strengthen further if producer sales stay slow, he added.
But prices aren’t getting support from buyers, as many feedlots already have coverage through April and into May.
“We typically see feedlots buying hand-to-mouth this time of year, but this year they’ve had a solid month’s coverage ahead of time,” Seitz said.
Feedlots have more coverage than normal because there’s a lot of barley around this year, and freight rates have been cheap — meaning they can buy from several locations, he said.
“They’ve been able to pull barley from all over Alberta and Saskatchewan.”
Another factor going forward, Seitz said, is that feedlots will likely sell part of their herds in May.
“So even getting a price for June, they’re not too willing to give bids right now, because they don’t know what demand is going to be then.”
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.