MarketsFarm – Feed barley prices in southern Alberta’s feedlot alley moved higher over the past few weeks, but the price rise will likely slow down as barley trades at par with feed wheat.
Feed barley and feed wheat are both currently trading at around C$225 per tonne delivered into Lethbridge, Alta.
“That’s a sell signal right there,” said Jim Beusekom, of Market Place Commodities on the two grains trading at par. He noted that barley had traded at a discount of about C$10 to C$20 per tonne to feed wheat since August.
Tight old crop supplies saw spot barley prices top C$280 per tonne at one point in the summer, before seasonal harvest pressure brought values below C$200 at the beginning of October. Farmer selling dried up at the lower levels, but Beusekom said values were back at a level where producers were moving grain again.
Barley typically moves to match either domestic feed wheat or corn imports from the United States. After two years of tight feed barley supplies and steady imports of U.S. corn keeping a lid on the upside, the market has shifted. While the adverse harvest means there will be more feed wheat in Western Canada, much of it is in Saskatchewan and that wheat still needs to get to Lethbridge.
In high feed wheat years, wheat tends to trade at a discount to barley. However, Beusekom said that hasn’t happened yet this year due to the logistics of moving the wheat from the countryside to Lethbridge.