Old-crop barley prices seen dropping significantly

The new-crop barley harvest is roughly two weeks away in southern Alberta, meaning old-crop prices are expected to drop sharply in the near term, says an Alberta broker.
    
“There still is a huge inverse of old to new crop and that’s starting to reconcile itself,” said Jim Beusekom, grain broker with Market Place Commodities in Lethbridge.

“Lethbridge barley moved from $295 per tonne to $255 per tonne recently. The new crop is trading at $210 per tonne, so there’s still another $40 per tonne drop to go.”
    
“Like we saw in the canola market, there was also a massive inverse. The same thing is going to happen with barley over the next several weeks,” Beusekom added.  
    
However, Beusekom said there is a small window for some producers in southern Alberta to harvest barley early and take advantage of the old crop prices.
    
“Some producers that start harvest in the next week can probably pick up some old-crop pricing,” he said. “But after that, it’s game over and on to new-crop prices.”
    
The change from old to new crop prices won’t affect the market’s trend, as new-crop barley is currently moving downwards as well. Holding the new-crop prices back is the U.S. corn crop, which is expected to be the largest ever.
     
“It will affect barley prices quite substantially,” Beusekom said. “New-crop corn would land in Lethbridge for around $230 per metric tonne, and new-crop barley is trading at $210 per tonne, so that’s quite a narrow spread to corn. It absolutely puts a lid to the upside of barley.”
     
Beusekom noted that barley can trade at the same price as corn, but it is rare to see prices trading higher than corn.
     
Barley value in Lethbridge is sitting at $210.95 per tonne, according to the Alberta Canola Producers Commission.

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