Canada: Barley market dealing with weak demand situation
With a crop size established at 8.85 mln tonnes, Canada’s market is particularly focused upon the weak demand situation, RMI Analytics said in their early February report.
Maltster demand seems comfortably covered and feed demand has dropped due to heavy US corn imports. Further, exports have dropped to nearly zero at the lowest level for the past 6 years. As a result, ending stocks are increasing, which puts the supply and demand in a much more comfortable position after the drought disaster in crop 2021.
There remains an ongoing dryness concern across western Canada and the key barley regions in the US, ahead of crop 2024 seeding. Only southern Alberta received any meaningful moisture over the past 30 days while in the US, North Dakota and Montana remain drier than normal at this stage.
Prices are lower for both malting and feed barley in Canada, as good supply searches for demand is limited. On a global basis, Canada has improved its competitiveness but still faces very fierce competition from other origins (e.g. France/Argentina). China continues to pull very strongly from Australia, which is expected to continue. This leaves Canadian farmers in a difficult position with very little demand for either malting or feed barley. A big US corn crop is expected to keep feed barley prices under pressure.
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