Canada: Canadian malting barley prices continuing on a decline

Prices for Canadian malting and feed barley have been moving in opposite directions for the past year, with malting barley continuing on a decline, while feed barley prices have been steadily moving higher the past 12 months, RMI Analytics said in their late June report.

The major price influence for malting barley is the on-going weak demand environment coming from brewing and distilling, which shows few signs of rebounding in the near-term.

In the USA, the crop potential for malting barley has already been limited by lower planted barley area, driven by weaker demand from brewers. Some stability is coming from Canada, where planted area is higher but crop development faces challenges. Feed barley in Canada and USA is impacted by US corn, and the prospects look very good at the moment for an average or better corn crop and therefore pressure on all feed grains.

RMI’s statistical model analysis for Canadian malting and feed barley forecast a mixed view. For malting barley, prices are expected to climb steadily through harvest, while feed barley is expected to see a harvest related drop in values.

The current combination of higher temperatures and overall dryness is a concern across North America, especially as these conditions impact key barley regions such as Montana and western Canada. From RMI’s Denver Barrel Connections event last week, the farmer roundtable provided a great overview of crop conditions from both Canada and the USA. The weather maps align with North Dakota being cooler than normal, stunting crop development to an extent, while the rest of the USA faces hotter/drier conditions.

In Canada, the same is true, particularly in Saskatchewan which has missed most of the rain that has fallen. In contrast, the scattered showers in Alberta have been beneficial and the stress on the crop is expected to translate into quality variability.

In relation to prices, the downward price action in feed barley is seasonal and also aligns with a possible lower selection rate for malting barley. The malting barley price forecast is supported by current weather.