MarketsFarm — Feed barley bids in Western Canada remain historically strong, despite easing off their highs over the past month and trending lower.
With bids of around $410 per tonne into the Lethbridge feedlot alley, feed barley “is still a sell,” according to Mike Jubinville of MarketsFarm, speaking on a webinar. However, he noted there were a few headwinds in the barley market.
The feedlot industry has become much more comfortable importing corn from the U.S., with the convenience of bringing up a trainload of corn — compared to contracting hundreds of trucks of local barley — keeping corn in feed rations even as the price spread shifts.
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For the week ending August 2, Western Canadian feeder cattle markets traded steady to as much as $10 higher. Quality yearling packages off grass were up as much as $15 in some cases. Prices for similar weight cattle were quite variable across the Prairies, which made the market hard to define. The market appears to be in price discovery mode for the grass yearling market.
The preference is still for barley, but Jubinville noted if the economic opportunity of bringing in corn by rail is there, feedlots would continue to take it.
On the export front, Canada remains very price-competitive shipping barley to China — but that could easily change.
A trade dispute between Australia and China is keeping Australian barley out of the Chinese market for the time being, but talks between the two countries could change that, Jubinville cautioned.
In addition, African swine fever is showing a resurgence in China, which could also limit feed demand going forward and cut into Canadian prices in those areas farther away from Lethbridge.
— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.
