Barley?

[les]

Anyone have any ideas on the outlook for barley next year with the bse?Is anyone changing thier plans --- meaning are you growing more ? the same? or less than usual?

[TOM4CWB]

Les;

In the seed business we are seeing no sales of feed barley, nor much wheat for that matter.

Canola sales have been brisk, with selling out of some varieties that would normally carry over, past seeding, in past years.

Looks like big CWRS/Canola crop... with a little higher pea acres (Fert. cost lower), some smaller interest in flax.

[wd9]

With record number of cattle in AB shouldn't that support the price of feed barley, maybe not high, but keep it from going low. Throw in low acres and feed may look good for sales next fall/winter. The bleakest looking crops in the spring look the best in the fall sometimes.

[charliep]

Would agree WD9 except to highlight we still don't know when/for what classes of cattle the US border will open. As well, I think we also need to follow the soil moisture/wather this summer. Continuation of the dry conditions from this past fall mean more pasture/greenfeed/silage from cereal crops plus lower yields. Hopefully we don't have to deal with this.

I wouldn't too far away from traditional rotations. Crops that have historically high prices and profitable I would forward sell a percentage. Crops that have average or below prices, I would be less aggressive selling new crop although I would have a target price in my mind.

[rain]

Do not overlook demand for world feed grains. corn prises are hot and that translates into to higher export prices for feed barley. I hate to say it the CWB could be looking for even more feed barley for export than this year. Unfortunately they have not even started to export this years feed barley Yet?

[crusher]

With the hot corn prices I too was thinking export feed barley might look attractive. Rain, I see that Canadian Barley Exports are pretty light. I also see PNW prices for barley haven't moved. How do you see a farmer with barley in the bin taking advantage of an increase in global feed grain values?

[rain]

Crusher if the CWB is correct do not grow barley. It is hard to beleive they are so negative new crop wheat and barley. I know if I had the resources they do I could do an even better job of forecasting prices.

Ignore there $20-$30 drop in barley prices. I think they got there wheat prices mixed up also.

Or maybe they have to offset this year losses in freight with next years price. Gentlemen the key work is EPO, EPO, EPO. Hopefullly with this years admin charges.

[rain]

If the CWB is correct you may want to consider shorting new crop barley in the 145 region after it rains or we get a good heavey wet snow.

[charliep]

I wouldn't include the CWB PRO in my forecast but rather would look at the current domestic new crop values. Western barley today - $142/tonne. Assume an average central Alberta basis $22/tonne. Can lock in today $120/tonne. CWB PRO $128/tonne. Ave. Alberta deduction - $48/tonne. Forecast total payments - $80/tonne. CWB 2row Malt PRO - $176/tonne. Ave. deduction - $46/tonne. Payment forecast - $130/tonne.

The signal to me is to find the highest yielding feed variety to seed on barley rotation acres and forward contract some. Nothing wrong with buying out of the money CBT corn calls (Dec. 04) on market dips if this provides confidence to make decisions.

As a barley user, this is one year I won't go into next fall 100 % uncovered/short.

What are others thoughts?

[rain]

Charlie can you find a new crop basis yet?

[charliep]

A contact I have indicated there is some new crop activity but very rare right now. From your question, I would expect you are finding the same.

As advisors, do we push farmers to hedge western barley starting at $145/tonne? Is a part of the strategy to keep some stops in place $5 to $8/tonne above the hedge? Realize this is not a hedge strategy but rather an admission that world/north American feed grain supplies are tight and subject to weather.

My thoughts are always to consider the things that might happen and actions you will take if they do. The strategy could just as easily be to keep selling.

[rain]

We wait the see what crop insurance is going to be. What kind of bais did your contact indicate Calgary Region for new crop barley?

[charliep]

Checked into whether Alberta crop insurance values had been made public and was told they had so I can let you know values. Feed barley was set at $115/tonne. The basis used is $20/tonne under. The price applies to all regions of Alberta.