Canada: Lethbridge’s feed barley market stagnant

Lethbridge’s feed barley market is stagnant, as farmers hold onto their grain and feedlots are not buying, Western Producer reported on April 5.

Farmers who have stored feed barley don’t want to sell at current prices, despite relative strength, said Jared Seitz, trade manager at Agfinity in Stony Plain, Alta.

It is a psychological barrier to get past the fact that prices are now lower than the C$220 a tonne level last November.

“It’s not so much that prices aren’t good enough to sell,” he said.

“It’s just getting back to the price that they could have got at harvest. It’s more of a mental disposition they have right now.”

He pegs Lethbridge feed barley prices at C$207 a tonne, as the market has been propped up by reduced farmer selling.

Seitz added that feed barley could strengthen further if producer sales stay slow.

But prices aren’t getting support from buyers, as many feedlots already have coverage through April and into May.

“We typically see feedlots buying hand-to-mouth this time of year, but this year they’ve had a solid month’s coverage ahead of time,” Seitz said.

Feedlots have more coverage than normal because there’s a lot of barley around this year and freight rates have been cheap, meaning they can buy from a wide area, he said.

“They’ve been able to pull barley from all over Alberta and Saskatchewan.”

Seitz also noted that feedlots will likely reduce on-feed numbers in May so getting a bid for barley delivered in June is not easy.

“So even getting a price for June, they’re not too willing to give bids right now, because they don’t know what demand is.”

06 April, 2016