Winnipeg, March 24 – Feed barley in Western Canada usually sees a spring rally at this time of year, although the uptrend will be limited by large supplies still overhanging the market.
Feed grains had trended lower through late February and into early March, with feed wheat leading to the downside. The losses in feed wheat spilled over to weigh on barley, but “now it’s feeling as if the market has found some support and is starting to make a turn,” said Kyle Sinclair of CorNine Commodities in Lacombe, Alta.
Sinclair said barley was undervalued compared to feed wheat, with tight feed wheat supplies causing some end users to shift their rations from feed wheat into barley.
“Going into the spring is typically a rallying time for the (feed) market,” said Sinclair, pointing to spring road bans, soft yard conditions, and the slowdown in farmer selling as producers shift their focus to seeding.
From a coverage standpoint, demand is solid – even for April.
However, he added that the one caution this year is that there is still a lot of un-priced barley held on farm.
“While I think you’ll see a rally, it could be short lived,” said Sinclair.
He said producers were still holding large supplies that would probably be released at prices of about 20 cents per bushel above current levels.
Many areas of Alberta are dry heading into the growing season and Sinclair expects the longer-term direction for barley would depend on moisture conditions later in the growing season.
If moisture levels improve over the next three to four weeks, the spring rally may be the best prices for some time.
However, if rain doesn’t come, growers may be able to sell some old crop barley for higher prices during the summer weather market.
Waiting for a weather rally is a gamble, and Sinclair noted that producers shouldn’t leave themselves 100 percent exposed.
