U.S. corn imports affect barley price
Growers might want to delay pricing their 2022 barley crop, says an analyst.
“With corn pushing higher, we don’t think there’s a major rush on the new crop pricing,” Marlene Boersch, managing partner of Mercantile Consulting Venture, told farmers attending the Saskatchewan Crop Organizations 2022 conference.
“We would like to see around $6.50 (per bushel) before we start doing that.”
Her advice on old crop is decidedly different, with prices hovering around $9 per bu.
“Be sold on all your current crop before we get anywhere close to new crop,” she said.
Canadian barley exports have been strong in 2021-22. Year-to-date exports are 989,000 tonnes, up from 746,000 tonnes the previous year.
That is despite a 35 percent reduction in Canadian supply.
China has taken most of Canada’s barley.
Exports will likely slow soon. Boersch is forecasting 2.3 million tonnes for the entire year, down from 4.6 million tonnes last year.
Feed use is forecast at 4.7 million tonnes, down from 6.1 million tonnes.
“I would have anticipated more domestic feeding but what we have done is we have increased monthly imports of U.S. corn,” said Boersch.
“Corn has increased in price over the last little while, so we’ll have to see if that scenario will continue for the rest of the year.”
Ending stocks are forecast at 300,000 tonnes, resulting in a four percent stocks-to-use ratio.
Boersch is forecasting eight million acres in 2022, down from 8.3 million last year.
Total supply is forecast to rebound to 10.2 million tonnes, up from about eight million tonnes in 2021-22.
Ending stocks will double to 600,000 tonnes but that is still fairly tight.
Exports should jump to three million tonnes, she predicts, and advised growers that barley shipped to China must have good germination because they use it primarily for malt.
Domestic usage should be robust in 2022-23 due to high corn values. She is forecasting 6.6 million tonnes of domestic demand for the crop.
Boersch thinks growers should consider taking out crop insurance. It is expensive but with tight stocks, volatile prices and uncertain weather, it can be an effective risk management strategy.
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