Barley markets were a bit more volatile this week as the idea of continued colder weather supported feed prices, while malt prices saw a bit of an uptick in the continued decent demand abroad.
More specifically, we know that China continues to buy a lot of Canadian barley. We indicated this in a post last week, but exports continue to be very strong. Canadian barley exports through Week 36 (ending April 8) of the 2017/18 crop year are pegged at 46,300 tonnes down 41.5% from 79,200 tonnes reported for the week before. Cumulatively, Canadian exports are now sitting at 1.43 million tonnes, up nearly 80% year-over-year.
Worth noting is that Russian barley exports are now sitting at just under 4.5 million tonnes. This is up 90% year-over-year, mainly driven by heavy buying from Saudi Arabia and Tunisia, despite stronger prices.
Earlier this week, the USDA released its April 2018’s issue of the World Agricultural Supply and Demand Estimates (WASDE). As it relates to the barley numbers, American ending stocks edged higher by 8%, or 5 million bushels, to now sit at 65 million bushels.
A slower pace of US barley imports is anticipated though as it dropped by 5 million bushels (or a third) to 10 million bushels. This can certainly be viewed as a bit of a negative for Canadian malt barley as it suggests the US market is less interested in importing Canadian product. However, we all know that the US market pales in comparison these days to the likes of China.
Looking abroad into Europe, Agreste says French barley area should drop nearly 3% year-over-year to just under 4.6 million acres. This is mainly because of winter barley acres falling 3.5% year-over-year.
However, thanks to the tighter global balance sheet, across all of Europe, barley acres are set to expand slightly, driven mainly by spring barley area. More specifically, Agreste is suggesting that 30.2 million acres of barley (both spring and winter) will get seeded for the 2018/19 crop, up 0.3% year-over-year. The main changes are seen as lower acres in France (as mentioned), Spain, and the UK, but higher acres in Germany, especially for spring barley.
In Australia, the latest weather reports show that much-needed rain is providing relief to Australian crop at the right time. Three months of consistent rain has improved the seeding process for Aussie farmers and with China constantly looking for feedstuffs, there’s certainly more attention being paid to barley getting seeded instead of wheat or even canola in the Land Down Undaa.
Back on the domestic price front, we saw some heavy-handed action on the FarmLead Marketplace, including the best price we’ve seen all year for feed barley into Lethbridge. Here’s a breakdown of some of notable (but not all) feed barley trades on the FarmLead Marketplace this week (all FOB farm prices in Canadian Dollars):
- $254/MT or $5.52/bushel in southwestern Alberta for April 2018 movement;
- $254/MT or $5.52/bushel in south-central Alberta for June 2018 movement;
- $229/MT or $5.00/bushel in central Alberta for June 2018 movement;
- $205/MT or $4.46/bushel in central Alberta for September 2018 movement (new crop);
- $207/MT or $4.51/bushel in south-central Saskatchewan for May 2018 movement
- $201/MT or $4.37/bushel in east-central Saskatchewan for 2Q2018 (Apr/May/June) movement
- $207/MT $4.51/bushel in central Manitoba for May and June 2018 movement
Is this the top of the market? We’re certainly at heights not seen in the past few years. That being said, there could easily be one more pop in this market in the next few weeks. However, we know that with this later winter, barley is looking like a pretty decent option instead of putting in spring wheat or canola.
Thus, the prices that we’ve got today are looking extremely attractive, especially for new crop. That being said, if you’re not 20% sold on 2018/19 new crop feed barley, we’d strongly recommend you get it posted on the FarmLead Marketplace today. We might be so inclined to move to 40% sold on new crop feed barley this week, but we’ll put out an alert if that’s the case.
That being said, with no sales this past week, for 2017/18 old crop, we sit at 90% sold on feed barley and remain at 40% sold on malt barley.
For 2018/19 new crop, we now sit at 20% sold on feed barley and remain at 0% sold on malt barley.
Have a great week!
– Brennan, Garrett, and Adrian
April 8 – Barley Weekly GrainCents Digest
April 6 – New Record For Canadian Malt Barley Exports
April 6 – More Optimism for UK Barley Crop in 2018
April 5 – Will Bill C-49 Be Enough to Fix Canada’s Rail Problems?
April 5 – EU Spring Barley Expected to Hold Bigger Responsibility in 2018
April 4 – Will Barley Be a Part of any NAFTA Re-Negotiation?
April 1 – Barley Weekly GrainCents Digest
March 29 – USDA Sees Lower US Barley Acres Again in 2018/19