Categories
Blog

Canada’s Barley Exports Drive Domestic Markets Higher


The challenge for the current crop year is the sudden change faced this crop year, with monthly Agriculture and Agri-Food Canada forecasts pointing to total exports (grain plus products) at 3 mmt in August, September, and October, 3.1 mmt in November, 3.4 mmt in December and 3.5 mmt in January. This forecast has increased by 16.7% in just three months and we are just shy of the mid-point of the crop year.

The most recent Exports of Canadian Grain and Wheat Flour shows grain exports of barley as of December at 1.5986 mmt, with 92.8% of this volume shipped to China.

In addition to reported exports, an additional 448,700 mt of barley is held in commercial storage as of week 25 (excluding process elevator stocks), a volume that is up 73.8% from the same week last year and 63.8% higher than the three-year average. Estimated farm stocks will be watched closely when Statistics Canada releases its Dec. 31 stocks estimates on Feb. 5.

Barley trade delivered Lethbridge has reacted by moving from roughly $200/mt at harvest to close to $300/mt this week. Saskatchewan Agriculture’s weekly average prices show bids in that province constant during the month with a high of $227.40/mt, the highest reported since April 2013. We are very much in uncharted territory, given Saskatchewan Agriculture data going back to 1980.

While AAFC is currently forecasting ending stocks to rise slightly in 2020-21, the agency seems slow to react to the realities of demand this crop year across many commodities and this may change. The challenge will be to ration demand with replacing barley with corn and wheat.

AAFC is currently forecasting a 6.7% drop in barley acres in 2021 due to competition from competing crops, along with a modest drop in stocks. At the same time, it is conceivable that the market does its job to result in higher acres seeded this spring.

**

DTN 360 Poll

This week’s poll asks what you think of the change in the U.S. administrations. You can weigh in with your thoughts on this poll located on your DTN Home Page.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow him on Twitter @CliffJamieson



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *