CNS Canada — The Lethbridge barley market has appeared to have bottomed out in January, as prices have rallied by $10 per tonne in the past few weeks.
“The barley market through the last two weeks has ticked up a little bit,” said Jim Beusekom, grain broker at MarketPlace Commodities in Lethbridge, Alta. “Lethbridge is trading around $155 (per tonne), up from the lows of $145 in mid-January.”
The feed wheat market was the main driver of barley’s weakness during January, but a lack of farmer selling due to extremely low prices has led to the slight bump in prices.
“Producers just aren’t willing to sell their barley at any less than the lows we’ve seen in January,” he said, noting a lot of barley has already been sold this season.
“The producers have done a pretty good job selling their barley, so they don’t necessarily have to sell at this price level. It’s not a huge priority for them to continue to market their barley.
“There is some carry into the spring and summer market, so producers can sell forward and pick up a little extra,” he said. “Of course, the condition is that they can load and ship it in that time period.”
However, that could be troublesome considering the grain-moving problems producers have faced during the past few months.
Looking ahead, Beusekom said barley would likely see an increase in value during the spring months and farmers should use that as a selling opportunity.
“I think we’ll see our normal seasonal price increase throughout the springtime. Following that, you don’t want to be holding grain in late summer and into the fall. It’s got the potential of dropping further and possibly taking out the lows we’ve seen in January,” he said, adding he doesn’t see anything bullish on the horizon.
“I’m going to say that producers ought to be careful when they see the futures market start to rally and think that’s a trend change. Those are selling opportunities. There’s still too much grain and not enough demand to use up everything, so use those opportunities to sell.”
— Brandon Logan writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.