Barley has been reported trading at $237/metric ton into the Lethbridge market this week, and the potential exists for even higher spot trades as logistics are hampered by the brutal cold seen across the Prairies. Environment Canada had released public alerts such as extreme cold warnings for all of the Prairies from Manitoba through Alberta this morning, although at noon today, this warning was removed for southern Alberta, much of Saskatchewan and Manitoba. A special weather statement remains in place for Manitoba due to a disturbance with highly variable conditions expected.
Current trade is close to the 33% retracement of the move from the June high to December low, which is viewed as a hurdle in technical trade. The next important report to be released will be Statistics Canada's Dec. 31 stocks report, due for release on Feb. 5, which only includes grain on farm while excluding unharvested acres.
When one considers marketing in the first three months of the year (January through March), Saskatchewan Agriculture cash price data for the past five years shows the last price reported in March higher than the first price reported in January in three of the five years, averaging $4.70/mt or 2.2% higher over the five years.
The same analysis for Lethbridge barley bids reported by Alberta Agriculture shows the bid climbing over the first three months in four of the five years, averaging $8.60/mt or 3.6% higher.
For those with a longer window for marketing, Saskatchewan Agriculture price data (delivered to an elevator) shows a $21.50/mt average gain from the first January price to the January through July 31 high, with a gain seen in four of five years.
Over the January-through-July period, Alberta Agriculture's price data delivered Lethbridge saw an average gain of $35.60/mt over the past five years looking at the January through July 31 high. Gains were realized in all five years.
While AAFC's supply and demand tables appear bearish for barley, with stocks forecast to grow by 907,000 mt, or 101%, to 1.8 million metric tons, the largest seen in three years, unharvested acres could play a role in distorting this outlook. As of the last crop reports released, 93.1% of Alberta's barley crop was reported harvested, along with 97% of the Saskatchewan crop. Using Statistics Canada's provincial yield estimates, this would represent roughly 476,000 mt of production.
Removing such a volume from the current AAFC balance sheet would result in ending stocks slightly below the five-year average and far less bearish than expected.
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Cliff Jamieson can be reached at firstname.lastname@example.org
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