(Resource News International) — Cash bids for feed barley in Western Canada have been holding fairly steady at some pretty weak levels and the outlook for values does not bode well.
“There is no shortage of supply and that is one of the reasons values remain at some poor price levels,” said Jerry Klassen, manager with G.A.P. Grains in Winnipeg.
The rise of the Canadian dollar toward parity with the U.S. currency also makes it cheaper for end-users to bring in U.S. corn as well as dried distillers grains with solubles (DDGS), he said.
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Klassen estimated feedlots in Western Canada have feed barley coverage through to the end of April and well into May already.
“A lot of the feedlots covered their feed barley needs ahead of the implementation of spring road bans,” he said.
However, feedlots, taking advantage of the strong Canadian dollar, have DDGS coverage already well into May and June, Klassen said.
Some were also believed to have taken forward coverage of DDGs for July, August, September and even further out, the dealer said, because of the strengthening Canadian currency and the price advantage it provides.
The increased availability of DDGS will continue to limit the upside in the cash bids for feed barley, Klassen cautioned.
End-users in the Peace River region of Alberta were, in particular, using DDGS to supplement feed rations on a regular basis.
Klassen also reiterated that the import of DDGS into Western Canada was expected to increase by about a half million tonnes, if not more, in the upcoming 2010-11 crop year from the previous year’s level.
Cash bids for feed barley, delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data, currently range from $2 to $2.45 a bushel; in Manitoba, $2.73-$2.98; and in Alberta, $2.09-$3.16.
At the beginning of March, cash bids for feed barley, delivered to the elevator, in Saskatchewan, ranged from $2 to $2.44 a bushel, in Manitoba, $2.81-$2.85; and in Alberta, $2.10-$3.27.
