Even near-drought conditions haven’t given the feed barley market a rally, and farmers are having trouble moving the last of their 2015-16 crop.
However, marketers warn that bearish factors are looming in the future, so farmers shouldn’t assume a rally is inevitable.
“With the lack of rain, guys just aren’t willing to pull the trigger until something is secured in the bin,” said Brandon Motz, co-owner of CorNine Commodities in Lacombe, Alta.
“We’re having trouble convincing the farmer that these are good prices to sell at.”
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Marketers across the Prairies said farmers haven’t been keen to sell old crop barley.
Barley has experienced spring rallies in recent years, and supplies have generally been short of feeders’ needs.
As the dryness on the western Prairies stretched east, many farmers who have cattle became worried about their own situation for 2016-17, while others stayed convinced that the market has to rise to account for the bad growing conditions at seeding.
It has created reluctance among farmers to sell.
However, marketers say a good rain could create a healthy crop.
“The May long weekend can be a turning point on feed grain markets,” said Jim Beusekom, an analyst with Lethbridge-based Market Place Commodities.
“If we get a good rain, it may change the farmers’ attitude from holding on to their grain to selling their stocks.”
Beusekom and other analysts were interviewed May 18-20, just as rain began to fall across much of Alberta.
Farmgate prices for central Alberta barley have been $4 to $4.10 per bushel for old crop and $3.90-$4 for new crop.
Many farmers were disappointed by the lack of a spring rally, which is a dependable part of the prairie grain economy. Barley prices usually rise in spring as road bans and pre-seeding preparations reduce barley deliveries and send feeders chasing after supplies.
However, marketers said there was almost no rally at all this year.
“If we did have a rally at all, it was 15 cents per bushel at most,” said Motz. “We didn’t have one lick of (grain delivery) problems in our office at all.”
Feed wheat has been scarcely available this winter and spring. An aggressive export program swept up many wheat crops that might usually have gone into the feed market, and prices have been too high for most feeders.
With abundant barley and expensive wheat, it has been attractive to go heavy on barley.
“It’s been a while since we’ve seen barley at a substantial discount to feed wheat,” said Beusekom.
“(In recent years), feed wheat and barley tended to be on an even dollar per tonne basis.”
Some think that hanging onto barley for much longer might mean keeping it into the new crop year.
“Once we get into June, I keep getting the feeling that there’s going to be no business,” said Errol Anderson of the Pro Market Wire.
“A lot of the feeders are pretty much covered.”
The American feed grain situation also isn’t encouraging for those looking for a rally.
“There’s this spectre of a huge corn crop coming,” said John Duvenaud of Wild Oats.
“The market is saying there is no big shortage at all.”
