Barley is Bearish

I met a very knowledgeable grain merchant yesterday that discussed the grain markets with our management group. The main thing that I took out of the conversation is that in the short term the barley markets may be worse than I thought. There seems to be a growing consensus that the only thing holding prices at these levels is that the supply is in strong farmer hands. The growing fear is what is going to happen to prices once we get to January and February when some selling begins. The barley carryover is heavy and the according to Informa we will have lower demand from feed yards over the winter. All of this is adding up to a very bearish outlook for barley over the next 6 months.

It is incredible that barley has moved from a $270 per tonne in July to $150 today. As I have mentioned before this experience proves that incremental buying or selling is a great natural way to manage your risk. It seems that if your farm needs cash flow in the next 6 months it would be a good practice to sell into rallies and take advantage of incremental sales.

If you are curious as to how barley is priced in your area, Ropin the Web provides pricing and support documentation.

 

Shaun Haney

Shaun grew up on a family seed farm in Southern Alberta. Haney Farms produces, conditions and retails wheat, barley, canola and corn seed. Shaun Haney is the founder of RealAgriculture.com. @shaunhaney

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