![#](https://e-malt.com/Images/left_top_corner16x200.gif) | E-Malt.com News article: Canada: Domestic barley use to remain unchanged but exports to rise by 16% this season![Barley news](https://e-malt.com/Images/Ear2a.gif)
For 2017-18, Canada’s total domestic use of barley is forecast to remain unchanged at 5.873 mln tonnes but exports are expected to rise by 16% to 2.7 mln tonnes due to stronger import demand related to lower world barley supplies, Agriculture and Agri-Food Canada said in its March report.
Carry-out stocks are forecast to fall by 27% to 1.6 million tonnes and remain near the previous three and five-year averages. The Lethbridge In-store feed barley price is forecast to increase due to tight domestic supply and decline in the supply of other domestic feed grain substitutes.
The Lethbridge barley price, October to mid-February had traded in the C$210-220/t range. However, in March the market jumped close to C$20/t to a crop year high. The seasonal upturn is related to late winter snows and continuing strong barley exports, mainly to China. In addition, the US$0.30/bushel (bu) increase in the old-crop US corn futures price has provided strong support for North American and world coarse grain prices.
Due to strong supply in North America, the price of domestic malt barley price has not increased to the same extent as feed barley. The premium for malting barley relative to feed barley has narrowed. It is now near the five-year average of US$38-40/t. To-date for this crop year, the world feed barley price has been trading at a premium of over US$30/t to the average world corn price. The previous five-year average for this spread has been about US$13/t. Generally, the world feed barley price tops out by the end of February so this recent price rally may deteriorate. Despite the softer market conditions, the average world malt premium still remains above the previous five-year average. However, for the first couple of months, the premium was about US$80/t and now it has fallen to below US$30/t.
For 2018-19, Canada’s barley-seeded area is forecast to increase 7% to 2.5 mln ha from 2017-18, rebounding from record low seeded area. Production is forecast to increase 5% to 8.3 mln tonnes due to the higher area and an average yield. Despite higher production, lower carry-in stocks will cause total supply to decrease by 2% to about 10 mln tonnes, the experts said.
Exports are forecast to decrease by 13% due to higher world supplies and a return to normal trade patterns. Barley carry-out stocks are forecast to increase by 6% and remain close to the previous five-year average. The Lethbridge cash feed barley price is forecast to decrease from 2017-18 due to larger North American and world barley supplies. However, there are projections for lower overall livestock prices for cattle, hogs and poultry which will reduce the decent feeding margins achieved in 2017-18.
Similar to the last couple of years, the US has again reduced the number and size of malt barley contracts as their malt quality inventory continues to remain very high. So far, Canadian new crop malt barley prices are only slightly higher than 17-18 as the barley inventory is also of high quality.
For 2018-19, the International Grains Council (IGC) is forecasting a slight increase in world harvested area. Assuming average yields, this should increase world barley production and reduce prices for both feed and malt barley despite higher world corn prices. If corn prices remained stable, a return to average spreads for feed barley to corn would reduce the world feed barley price by US$20/t.
22 March, 2018
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