Farmers with feed barley in their bins should consider selling it sooner than later, say analysts.
Although the latest Statistics Canada planting survey showed farmers seeded fewer barley acres than they planned to in early spring, the area is still up 17 percent over last year.
Farmers in the United States have also planted more barley acres and the giant corn crop, which could top 10 billion bushels, looms threateningly over the feed market.
“Carrying in barley to next year I don’t believe that is a good option. Farmers should sell to the board or sell to the domestic market, but do it prior to July 31,” said Gord McTavish, cash barley trader with Benson-Quinn, Growers Marketing Service in Calgary
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“There is nothing in the U.S. market or the Canadian market that is telling me that barley is going to strengthen in September.”
Last week, the Canadian Wheat Board issued an open contract call for feed barley. It closes July 14.
Board analyst Peter Watts said sales opportunities arose in North Africa and the Middle East.
“The overall global barley situation is becoming fairly tight as a result of the drought in North Africa and in Iran and it’s still fairly dry in Saudi Arabia,” he said.
“Those countries are in need of barley now, not in three or four months, so that is one of the reasons behind the call.”
This demand has not pushed up the global barley price, rather it has helped to prevent its fall in the face of large supplies of competing feed grains, he said.
Ian Morrisson, a grains analyst with Agricore in Winnipeg, said the decision on whether to deliver to the board or to the domestic market depends on location.
After a lackluster year, the domestic feed market, based on the Lethbridge, Alta., price, has strengthened so it is now about $5-$6 a tonne higher than the July futures price.
“The hand-to-mouth buying served (feeders) pretty well, but now they’ve got caught and everyone is saying where is all the barley?” said Morrison.
“When you start trading over the futures, that’s a signal to sell. We’ve been encouraging everyone, whatever old-crop barley they don’t need for on-farm feeding, they should pitch it.”
For producers in southern and central areas, the domestic market is probably the best bet and in places farthest from Lethbridge, northern Alberta and Saskatchewan, the CWB might be the better option. It all depends on freight, he said.
Producers also must consider the board’s longer payment schedule.
