New-crop barley prices in Western Canada are expected to trend downward with help from a larger-than-expected U.S. corn crop, said Jim Beusekom, grain broker with Marketplace Commodities at Lethbridge, Alta.
“The prices depend on what happens to new-crop corn,” he said. “Many analysts are predicting new-crop corn to drop below US$5 per bushel on the futures, and if it does, new-crop barley will continue to decline.”
“If we get a rally on corn in the summer, new-crop barley might hold. I think the trend is downward right now, going into the new crop,” he added.
Currently, new-crop barley is trading much lower the old crop, simply because of the competition from corn and other feed options. Beusekom also noted prices are moving back to more historical levels, after the 2012 drought pushed prices significantly higher than usual.
“New-crop barley is trading at $60 to $70 (per) tonne discount to the old crop and that’s simply because competition from corn,” he said. “We’re reverting back to historical price levels, after drought conditions that affected the market in 2012.”
As for old-crop barley, producers are moving the remaining grain left on the farm.
“There are few supplies left, but not much is needed either,” Beusekom said. “Demand declines weekly through July, August and September.”
Barley value at Lethbridge is currently sitting at C$245.13 per tonne, according to the Alberta Canola Producers Commission.
— Brandon Logan writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.