2003-04 Barley Carry out

[rain]

Charlie AAFC is forecasting a 1.78MMT barley carryout this year. Assuming we have alivstock industry a year from now. do you not feel the barley futures are way under valued. The charts at this page if they are correct would indicate so http://www.alternativegrain.com/market_report.htm

What do you think.

[charliep]

Rain stictly based on the carryover, you are likely right. I am a little uncomfortable with the assumptions on the demand side - both barley exports and domestic use. 1.2 MMT seems a little tight for the current year. My guess is carryouts will be closer to 1.5 MMT for July 31/03 and 2 to 2.5 MMT next year. Time will tell.

[rodbradshaw]

Charlie

If demand is down will we see people holding marginal quality Malt barley hopeing for the Maltsters to take it instead of dumping it in the feed market?

Question two

What is the price of barley in the PNW and will it return to being a premium market over our domestic market?

[rain]

Why does everyone figure demand for barley in Canada will be lower next year. Demand for imported corn will very likely be down 2MMT next year.

[TOM4CWB]

Rain;

The supply of barley avaliable is the issue at hand.

If we have a good crop, then the market price will fall to a basis of freight and handle UNDER PNW/Vancouver Port barley selling prices, instead of being cost competitive with imported corn, (during shortages of feed) which put barley prices Basis over export prices.

This difference is well over $1/bu, which is now reflected in futures prices for fall. The CDN dollar appreciation adds to this differential by another 15%, making the drop bigger.

Will farmers sell barley at $2./bu?

When supplies are replentished, will they have any choice?