October 1, 2007

Canadian barley prices strong despite more US corn imports

Strong international demand for feed barley should keep prices for the commodity high in western Canada, despite increasing imports of US corn, traders said.

Barley futures at the Winnipeg Commodity Exchange are trading at record high levels, with the December contract closing at C$217.50 per tonne on Thursday (September 27). Cash values are equally strong, as are the Pool Return Outlooks from the Canadian Wheat Board.

An Alberta feed grains broker said the combination of the high barley prices and the strong Canadian dollar was resulting in more US corn making its way into Canadian cattle and hog feed rations. The broker said US corn was landing in Lethbridge at C$212 per tonne, which compares with barley at C$218 per tonne.

While the US corn imports should serve to put a ceiling on the domestic barley market, the broker said she had yet to see a damping of barley values. She said strong export demand, with the CWB upping their 2007-08 projected feed barley price to C$254 per tonne on Thursday, would keep domestic feed values high as well.

The CWB is still working to help facilitate the private feed barley business that was put on the books in expectation of an open market that never happened. A court ruling left control of barley marketing with the CWB.

Spokeswoman Maureen Fitzhenry said most of the private business should be taken care of by the end of October, with the CWB booking its own sales for November.

Fitzhenry said that while prices are strong domestically, international values are also high, "so there shouldn't be trouble offering a good price to farmers." However, if farmers are reluctant to deliver to the CWB, buying feed barley from the cash market is a viable option in order to fulfil sales commitments, she said.