Canada: Barley use forecast to increase to 6.226 mln tonnes this year, exports expected to drop 2%

For 2016-17, Canada’s total domestic barley use is forecast to increase to 6.226 mln tonnes from 6.169 mln in 2015-16 due to higher industrial use, Agriculture and Agri-Food Canada said in their June report.

Exports are forecast to decrease by 2%, to 1.95 mln tonnes - the lowest level in 13 years - due to lower world feed barley use while malt barley trade remains at trend levels.

Barley carry-out stocks are forecast to increase by 47% to 2.1 million tonnes. This is more than 50% higher than the previous five-year average.

The Lethbridge cash feed barley price is forecast to decrease from 2015-16 due to the higher feed grain supplies, softer US corn prices and lower world barley prices.

Since the end of April, the Lethbridge cash market staged a strong rally. It traded up to par with Lethbridge feed wheat, gaining C$25/tonne (t) to post a crop year high of C$185/t before dropping back. A slowdown in producer deliveries as spring seeding ramped up, lots of high vomitoxin wheats and the strong April run-up in the US cattle and hog futures markets were all contributing factors. Fundamentally, there still should be good supplies of barley based on the carry-out forecast and barley feeding pace to date. World prices for feed barley continue to hold their premium to corn since moving higher at the beginning of March. However, they should soften as the Northern Hemisphere winter barley crops harvest is just around the corner and the new crop supply becomes available. World malt barley values have also moved slightly higher as the month of June began despite Australia and the EU having ample stocks.

For 2017-18, Canada’s barley-seeded area is forecast to decrease 8% from 2016-17 to a new record low of 2.4 million hectares due to large feed barley carry-in stocks and supplies of other feed grains.

Production is forecast to decrease 13% to 7.6 mln tonnes due to the lower area and a forecast for average yields. Despite higher carry-in stocks, lower production will cause total supply to decrease by 5% to 9.8 mln tonnes, the analyst said.

Total domestic use is forecast to increase by 3% due to higher feed use and flat industrial use.

Exports are forecast to increase by 3% to 2 mln tonnes due to lower world barley supplies and soft demand.

Barley carry-out stocks are forecast to decrease to 1.4 mln tonnes and decline below the previous five-year average.

The Lethbridge in-store feed barley price is forecast to increase slightly due to the tighter total barley supplies and a decline in the stocks of competing off-grade and other feed grains.

Barley seeding on both sides of the border got off to a slower than average start. However, by mid-May the US recovered to the five-year average and seeding continued until the beginning of June. The long range weather forecast for the North American barley area seems favourable, with normal temperatures, no drought conditions and a forecast for above-normal precipitation in Western Canada.

Most forecasts are calling for a smaller world barley crop in 2017-18 with lower barley feeding due to the large world corn supply. However, malt trade and prices are forecast to increase.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .