Barley up and looking to move higher

(RNI) — Cash barley prices have climbed about $7 per tonne in the southern Alberta cash market in the past week as dryness plagues production in key barley-producing areas in Alberta and Saskatchewan, according to a trader.

“The market doesn’t seem to realize that prime barley land in Saskatchewan and Alberta is very dry,” said a market analyst. Farmer selling, he indicated, is already starting to significantly slow as producers become concerned about the 2009 crop.

The analyst noted that barley prices have been depressed, compared to U.S. corn markets, in recent months due mainly to the large barley supply in Western Canada.

However, he added, barley’s “huge” discount to corn has been slowly disappearing as the grain trade notes the spreading production problems on the Prairies.

Currently, he said, barley in Lethbridge, Alta. has been trading in the $172-$173 per tonne area and further gains are likely as dryness remains a persistent problem.

Another cash trader in Alberta noted that barley has been at a larger-than-normal discount to U.S. corn, but that has been narrowing as demand is also starting to show up as end-users have become concerned about finding reasonably-priced barley.

There is concern, he said, that with U.S. corn supplies likely to be very tight this year and dryness reducing Western Canada’s barley crop, end-users are starting to cover some of their new-crop needs.

The analysts noted that with many U.S. analysts predicting that the average U.S. corn prices will be over $5 per bushel, Canadian barley values are likely to be trading over $4/bu., probably close to the $4.25/bu. in the Alberta market.

According to Prairie Ag Hotwire, current barley cash bids range from $2.98 to $3.59 per bushel in Manitoba, up from $2.52-$2.83 on May 8. In Saskatchewan current prices are $2.49- $3.10, up from May 8’s $2.25-$2.74, while in Alberta, current values range from $2.75- $3.82 per bushel, up from $2.56 – $3.61 on May 8.

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