(Resource News International) — Cash bids for feed barley in Western Canada have managed to strengthen over the past number of weeks, but the upside continues to be limited.
“The main reason for the firmness in cash barley bids is that producers have remained reluctant sellers,” said Jerry Klassen, manager with G.A.P. Grain and Products in Winnipeg.
“I was talking to some trucking firms, who indicated they haven’t been out to collect feed barley from producers for over five weeks in some cases.”
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The refusal of producers to deliver and the need of some feedlots to cover nearby commitments has translated into the firmer bids, he said.
The firm feed barley cash bids, however, were not seen lasting for very much longer.
“The value of U.S. corn has been steadily falling in anticipation of record acreage and record production, and with that decline the prospects of increased U.S. corn imports into Western Canada are rising,” Klassen said.
He also warned that with the prospect of increased ethanol output in the U.S. comes increased distillers dried grain (DDG) availability, which end-users in Canada will easily accommodate.
He noted feedlots have DDG needs covered through to September already.
“Right now feedlots are using a combination of feed barley, silage and U.S. DDGs,” he said. “That is going to change soon to U.S. corn, U.S. DDGs and silage.”
Western Canadian feedlots will turn to U.S. corn when the spread between feed barley and U.S. corn hits $15, delivered into southern Alberta.
Cash bids for feed barley, delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data, currently range from C$2.31 to $2.74 a bushel, in Manitoba $2.64-$2.79 and in Alberta $2.33-$3.51.
Cash bids for feed barley, delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data in early June, ranged from $2.06 to $2.39 a bushel, in Manitoba $2.38-$2.68 and in Alberta $2.22-$3.37.
