(Resource News International) — Feed barley bids in Western Canada have again eased to some pretty depressed price levels, but values should begin to stabilize at these lows.
“There had been some downward movement in feed barley bids given the drop-off in demand and the movement toward new lows in U.S. corn values,” Winnipeg-based analyst and grain trader Jerry Klassen said.
However, the stabilization of dried distillers grain (DDG) values and a price recovery in U.S. corn futures from their lows has helped to hold and even firm up barley prices in Western Canada to some degree, Klassen said.
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Prices for feed barley are now being determined by DDGs, which have gained a large portion of the feed demand in Western Canada, he cautioned.
The large amount of DDGs coming in from the US, the lack of feedlot demand in Western Canada, the harvest of ample alternative feed grains, and reports of higher-than-expected barley yields from the Canadian Prairies have all combined to push bids to their lows, Klassen said.
“There do not appear to be any shortages of feed barley in Western Canada,” he said.
The continued decline in livestock numbers in Western Canada also only serves to further the bearish prospects for the barley market.
“Feedlots have now covered most of their feed needs through to the end of November and also into December,” Klassen said. “I would estimate that about 60 per cent of the feedlots’ December needs have been covered.”
He forecast that feed barley cash bids should be able to hold value at these levels, but market activity will likely become extremely stagnant over the next while.
“The western Canadian producer is typically a steady seller of barley during the winter, with the exception being when there are extremely frigid outside temperatures,” Klassen said.
That selling was likely to prevent any real run-up in prices.
Cash bids for feed barley delivered to the elevator in Saskatchewan, as provided by Prairie Ag Hotwire, currently range from $2.48 to $2.64 a bushel, in Manitoba from $2.72 to $3.05 and in Alberta from $1.96 to $3.48.
At the end of October, feed barley cash bids delivered to the elevator in Saskatchewan were $1.85 to $3 a bushel, in Manitoba around $2.72 and in Alberta $2.32 to $3.53.
