Feed barley futures saw a good rally in mid-August, rising about $19 a tonne or 15 percent in two weeks.
The market reflected heat and lack of rain cutting into barley yields in Western Canada and the same conditions threatening the American corn crop.
But on Aug. 25, the October barley futures contract fell the $7.50 per tonne daily limit, reflecting increased harvest activity and cooler weather in growing areas in Canada and the United States.
Also, a Midwest crop tour last week sponsored by the American newspaper ProFarmer estimated the U.S. corn crop at 10.001 billion bushels, only slightly lower than the most recent U.S. Department of Agriculture forecast and higher than many expected.
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The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
On Aug. 22, Statistics Canada estimated the Canadian barley crop as of July 31 was 12.03 million tonnes, down from the June estimate but up from last year’s 7.28 million.
It is also smaller than the 10 year 1993-2002 average of 12.4 million tonnes.
There is the possibility that the final total will be smaller because the estimate was based on farmer surveys in late July, before the heat wave.
We received an indication of how the hot weather affected the U.S. crop in the weekly Aug. 25 USDA crop status report.
It surprised markets by cutting 10 points from the good and excellent categories in the corn crops.
Traders anticipated a three to five point cut for corn.
That means only 50 percent of the corn crop is rated in the good or excellent category now, compared to 60 percent the week before, but it isn’t as bad as last year when just 42 percent was rated good to excellent.
With the likelihood of a heatwave fading as we move toward fall, it is likely that feedgrain markets will settle down until harvest is complete, unless it turns wet and delays combining.
Once harvest is complete, the market will focus more on demand and exports.
In Canada, the big story will continue to be the impact of the border closure on the cattle herd. It is still hard to know if and by how much the crisis will affect the amount of barley fed.
In the U.S. the export picture will have a big impact.
A brisk sales program would again light a fire under feedgrain prices.
