Canada: Drop in production gives some support to feed barley prices

A 16.8 per cent drop in the size of Canada’s barley crop has given feed barley prices some support, according to an industry-watcher in Alberta, Manitoba Co-Operator reported on September 19.

“The market is looking fairly strong,” said Allan Pirness of Market Place Commodities in Lethbridge. “It’s made things a little firmer for new-crop feed grain.”

Wet weather in the spring delayed seeding in many areas so there were already expectations this year’s crop would be lower.

Where Canada in 2016-17 grew 8.8 million tonnes of barley, Statistics Canada on September 19 released its latest estimate for the 2017-18 crop, pegging it at just 7.3 million tonnes.

Feed barley prices are sitting around the C$200-C$205 per tonne mark, Pirness said, up slightly from last week when they was closer to C$195.

The same range holds true for feed wheat as well, he said.

“Feedlots aren’t bidding up for wheat and the way the winter wheat price has gone for export opportunities to the line companies, they’re not bidding up either.”

Feed buyers, however, will likely have options open to them soon, due to problems in the U.S.

“Given the lower quality of malt barley in North Dakota, Montana, some of that will find its way into the feed market,” said Pirness.

The U.S. has another big corn crop this year, and South America is also expected to produce large supplies, he said.

“Some of the U.S. customers will buy Brazilian corn instead of U.S. corn, so the U.S. will have to go somewhere with its corn.”

Feedlots in Alberta have been chopping their corn silage a couple of weeks earlier than last year, he said.

“The corn silage crop looks really good this year in southern Alberta.”

With that in mind, Pirness doesn’t expect to see any major price spikes in the near future.

“Canadian barley and wheat for feed doesn’t have a lot of upside potential at the moment.”

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