(Resource News International) — World barley prices have been charging higher in recent weeks — something not entirely reflected or realized at this time in domestic Canadian feed barley valuation.
“All the hot, bullish news of late associated with export impairment from Ukraine/Russia due to drought has inspired upward price momentum not only for wheat, but also world feed barley,” said Mike Jubinville, an analyst with ProFarmer Canada.
“The emerging situation increases the once-limited opportunity to restart offshore sales of Canadian feed barley.”
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It was doubtful, he said, that Canadian domestic feed users have had the chance to fully discount this emerging market event.
“Price convergence of our domestic market relative to the world market often takes time,” Jubinville said. “Part of the convergence in terms of relative price and the speed to which it occurs will depend upon the Canadian Wheat Board actually conducting sales to countries now having trouble with acquiring FSU (former Soviet Union) supply.”
World feed barley trade is currently 15 million tonnes or so annually. Combined FSU effort represents nearly half of world trade. Reduced FSU market competition leaves the rest of the world scrambling, at least in the short term, Jubinville said.
EU feed barley accelerated from US$130 per tonne a few weeks ago to US$180 as the Russian news came to light, he said. There are now reports of free-on-board (fob) port quoted as high as US$250, but price movement is very much in flux these days given the volatile pricing environment.
Jubinville said the CWB is reported to be showing hesitancy about offering feed barley, but trade sources say US$225 per tonne fob Vancouver is probable now. That’s up from recent indications for Japanese tender of around US$190 per tonne, the latter being about $3 per bushel ($138 per tonne) to farmer in Edmonton, he said.
“If the CWB could put together some US$225 per tonne Vancouver sales, that would represent a price in Edmonton to farmer of about $3.50-3.75/bu.,” he said.
Some will say world prices have gone too far, too fast, citing what’s occurred recently in wheat, he said. But just the same, it would appear $3/bu. feed bids in Alberta and into Saskatchewan may yet need to ramp up to another level to bridge the gap to changed global dynamics.
