Declining feed wheat and corn prices over the last half of December have the potential to pull barley down as well, according to a grain broker.
Kyle Sinclair noted barley has so far held relatively firm in the key Lethbridge livestock feeding area, despite the losses in other grains.
Barley is more likely to go down, than for everything else to go back up, said Sinclair, a broker with Agfinity at Spruce Grove, Alta. "The overall sentiment would be fairly bearish."
Farmers are not tight on cash flow and are not willing sellers, which may be helping prop up the barley market, he said. However, he added, buyers are also covered through February.
Feed wheat typically trades at a $6-$7 per tonne premium over barley, but Sinclair said the two crops were currently trading at similar levels in the $275-$280 area into Lethbridge.
While wheat was looking a little oversold, he said there was more room for barley to go down than for wheat to rise.
"The next couple of weeks will be critical for telling which way the market will go," said Sinclair.
The barley market has held in a narrow range for some time, he said, and whether it breaks higher or lower will determine the trend into the spring.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.