new crop barley

[Ron]

just looking at the corn futures and wondering how we could take advantage? with winnipeg not linked to chicago (corn comes into canada but feed grains dont go out) if corn tanks barley will but when corn rises barley doesnt seem to match it (dont even want to look at new crop feed wheat). Lack of liquidity (?) is also a factor in winnipeg new crop.
any suggestions?

[melvill]

Good questions Ron. There are a couple of things we have to keep in mind about barley. The most important thing is ethanol, but not liquid barley or single malt, BTW.

As you probably know, corn prices are being driven by the delirium of corn = fuel. So far barley is not part of the corn = fuel discussion so, therefore, in my opinion, barley isn't going to follow corn as closely as barley producers would like. Of course, the other side of the coin is that barley feeders are not unhappy about that.

If Canadian policy changes to dramatically increase Canadian ethanol production become a reality AND changed barley kernal characteristics - higher starch, lower fiber - mean that barley = fuel, feed barley prices may much more closely follow U.S. corn prices.

Of course, I don't need to remind you that, at times in the past, we have had made-in-Western Canada barley prices that were at quite a premium to corn. At that time, I don't remember barley producers wondering that barley wasn't following corn.

[cottonpicken]

Barley will be making its ten year highs shortly.

[melvill]

CP, I'd sure like to meet you in person 'cause I've run into some two-legged bulls in my time but none as bullish as you. Course, I'm guessing I'd have to climb onto the roof of your house and talk to your while you are fiddling but I guess I could put up with that! LOL.

May I respectfully suggest that you change your pseudonmym to "Fiddler-on-the-Roof". More LOL.

[TOM4CWB]

melvill,

Lets do a reality check.

If malt & milling wheat WERE trading at world values... feed would be at least <$.50-$1/bu higher RIGHT now.

The CWB pool will only be able to hold down prices so long.

What happens if we have an inkling of a dry spring in 07? We will have new crop at $4/bu in an instant.

Yesterday our local elevator was offering $3/bu fall picked up in the yard.

It is hard to believe things have changed... but we HAVE and energy based grain market... Black Oil determines our grain prices RIGHT now!

Did you see that big ethanol plant in Spain just switched from feed wheat to barley? Right now IT Wouldn't be smart to bet against C.P. would it?

[cottonpicken]

With corn kicken ass like it is how can you bet against barley?
I can understand people not understanding the relationship between oil and grain but barley and corn?That is so obvious its not worth talking about.But here we go.
By 2009, ethanol in the states will need 5 billion bushels of corn.
Let alone Canada.
What the hell are the animals going to eat?I dont know the numbers on what the feed value of ethanol by-products are but we will have a MAJOR shortage of feed grains.
And what will fill that void?
But guess what- were going to have a shortage of wheat acres,canola acres,mustard acres,lentil acres,pea acres,soy acres, cotton acres,flax acres,oat acres,etc,etc,etc,etc,etc,etc,etc,etc,etc,etc,etc.
See how this works.
See how there is a direct relationship to all ag products.

Im sorry if my opinions dont jive with conventional thought and a bunch of old "wisdom" but the paradigm has changed.
Mel i'll meet you for a beer anytime but i have to warn you though-i will talk you out of putting your life savings in that buggy whip company.

[cropduster]

I like your"the cup is half full" attitiude CP......but......Your statement"what are all those cattle going to eat"is somewhat misleading.I(and a lot of cowboys) had the same feeling about the effects of the ethanol industry.NOT NECESSARILY TRUE!!The bi-products of that process(until further innovation)are ONLY for the red meat industry!More people with your attitude will get to make money from those byproducts than just the truckers involved with cattle!At the Informa conference in Calgary this past fall it was stated that they felt the cost of basic "feeds" would NOT, in the long term, go up by more than 10 to 15%.UNFORTUNATELY for those that can`t accept change there will be trouble, BUT, for the innovators there will be new horizons!You are right,Melvill will have to sell those buggy whip company shares!!

[melvill]

Alright CP and CD, I ducked that lob. However, I'm not selling the buggy-whip company shares! Somebody has to provide that stuff for horse nuts. If you don't believe it, go to the Sandpoint, Idaho, heavy horse show. There are people there doing very well buying old horse-drawn equipment, restoring it and selling it for good money.

In all seriousness though, I wasn't saying that barley wouldn't go up with corn but I'm still not convinced that barley will go up and down step by step with corn because of the different uses. If we get a high carbohydrate, low fibre barley variety, that's wanted by ethanol makers, then things will change.