Canada: Attractive barley price levels expected to lead to barley acreage, production increase in Canada
Canadas barley crop 2020 is estimated at 10.74 mln vs. 10.38 mln tonnes the year before, H. M. Gauger GmbH reported earlier in February.
Barley export estimates for the present crop year range from 3.0 to 3.6 mln tonnes. By mid-January 1.8 mln tonnes have been shipped, the vessel line-up shows further 380,000 tonnes to be loaded. Only 100 150,000 tonnes are for Japan and the U.S.; China will take all available balance. So far Chinese interest has been for feed barley, but they are expected to buy also several cargoes of malting barley, the industry observers said.
Markets are very firm. The Lethbridge feed barley market is trading at C$ 295 February, with C$ 5 monthly increment for the following months. The market is about C$ 100 higher than a year ago. U.S. Yellow Corn, normally an interesting feed substitute, is no alternative this year, uncompetitive against domestic barley.
Old crop feed barley CIF China prices had moved from USD275 to app. USD300, which stopped purchases at least temporarily. Instead the Chinese turned to new crop barley and covered about 1.5 mln tonnes for Sept/Dec shipment. Fob markets had started at USD250 and have moved to USD 272 to-date.
Price levels are very attractive for Canadian farmers, therefore private estimates are that the barley acreage will increase this year from 2.8 to 3.2 mln ha, the crop from 10.7 to 12.0 12.5 mln tonnes. The official Outlook for Principal Field Crops shows a reduced barley production of 9.5 mln tonnes in favour of a larger canola crop, but is disbelieved by the trade.
Chinese new crop acquisitions of oilseeds and grains indicate a strong continuation of their grain purchases throughout 2021/22. Markets look stable to bullish long term. One bottle-neck for Canadian grain exports is the Pacific coast port capacity, which requires a good long term shipment planning. The Canadian malting industries must reckon with expensive barley supplies this year.