Canada: Increased barley crop forecast now absorbed within market, analysts say

In December, the increase in Canada barley crop forecast to 8.85 mln tonnes was established and this better yield result has now been absorbed within the market, RMI Analytics said in its latest report.

Farmers are reluctant to sell feed barley while malting selections are still possible; reduced feed barley demand is due to significant imported corn volumes at present.

The higher production level than earlier expected has increased the ending stocks forecast to a more comfortable level, and the same holds true for the US, where a rebound in production has helped return inventories to more historical levels. This is helpful as attention turns to crop 2024, and the normal pressure for barley to hold planted area in both the US and Canada. Subsoil moisture levels remain low, which possibly supports barley area in 2024 if the situation does not improve.

Canadian barley prices have drifted lower, as domestic demand remains weak and competition is rather fierce in global markets. Domestic feed barley remains impacted by corn imports from the US and barley export pace has drifted below the levels of the last five crop years. This could improve as feed barley prices drop, and the competitiveness of Canada in global markets improves. Australia’s return to the supply for China is expected to have an ongoing impact in the months ahead.

Early forecasts point to a lower crop 2024 seeded area in Canada, the analysts said.

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