Canada: Barley crop estimate raised to 8.85 mln tonnes
RMI Analytics’ barley crop estimate 2023-24 for Canada is raised to 8.85 mln tonnes on the back of a large increase in the StatsCan crop estimate at 8.9 mln tonnes (up from 7.84 mln tonnes in the September 2023 report).
StatsCan’s estimate was above trade predictions of 8.5-8.6 mln tonnes but this increased number is still 1.1 mln tonnes below crop 2022 production. Quality variability remains a small challenge as proteins are reported in a range of 11-14%.
As a result, Canadian barley exports and domestic feed usage are increased slightly due to the larger crop, but the competitiveness in global markets and sizeable US corn imports are limiting factors. Ending stocks have recovered sharply from the 2021 drought impact. So far, exports in the crop 2023 shipping window are running at the lower end of the five-year range.
The increase in production is expected to weigh on prices over time but so far prices are holding steady. Feed barley prices are down slightly with domestic values on the defensive with the confirmed higher production level. Cattle feeders have coverage, in particular US corn, which adds to the bearish tone for feed barley as current demand is low. Malting barley faces the quality challenges outlined and prices are holding steady.
New crop (2024) domestic feed barley is trading at a CAD5-15 premium per tonne over spot prices for September-December 2024.
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