Canadian cash feed barley prices have jumped since mid-January.
According to daily elevator prices posted on the Alberta Canola Producers Commission website, the average Lethbridge barley bid rose to $256.65 per tonne last week, up from $235.65 in mid January.
The same site says Lethbridge feedlots are paying on average around $284 for 288 g per 1/2 L, maximum 15 percent moisture.
Statistics Canada said Feb. 5 that barley stocks as of Dec. 31 were 5.09 million tonnes, within the range of pre-report forecasts but a little less than the average.
Last year at the same time there were 5.48 million tonnes in storage. In 2010-11, there were 5.73 million and in 2009-10 7.55 million tonnes.
So stocks are tight and the price is adjusting to ration demand.
The U.S. Department of Agriculture: The Feb. 8 report made only minor revisions in supply and demand but triggered a sell-off in oilseeds.
Canola and soybeans had rallied in the weeks leading up to the report on strong domestic consumption and exports and a slight deterioration in the Argentina soybean crop because of dry weather.
The USDA confirmed the market’s thinking about U.S. soybean year end stocks. In South America, it trimmed the Argentine soybean crop estimate by one million tonnes to 53 million but raised Brazil’s outlook by the same amount to 83.5 million tonnes.
They say a bull market needs to be constantly fed bullish news, and the USDA report was simply not bullish enough, so traders sold to capture profits from the recent rally.
Forecasts for rain this week in Argentina added to the downturn. A record soybean crop in the region is all but guaranteed, but trimming is possible. The Buenos Aires Grain Exchange has already pegged the crop at 50 million tonnes.
Dry U.S. Plains: The area received moisture last week, with eastern Kansas and eastern South Dakota benefiting the most. It was no drought killer but shows that the region can receive snow and rain, even if most longer-term outlooks remain dry.
Be aware that the drought does not affect the U.S. soft red wheat crop, which is the one traded in Chicago. It is grown mostly in the eastern Midwest, and moisture there is good.