Since the start of the crop year, the Lethbridge cash basis to the nearby western barley futures has remained at levels approximately $5.00/tonne above the levels seen in the previous two crop years. Since mid-March 2001, Lethbridge cash barley has been trading at a small premium to the nearby futures. However, during the last week of May 2001, this premium reached a high of $12.70/tonne. The increase in the Lethbridge cash premium to the nearby July futures reflects a timing difference between the Lethbridge cash price, which is a spot price, and the July futures. Taking delivery of July futures means that the product may not be made available for shipment until early August.
The immediate demand for barley has also been reflected in the July/Oct barley futures price spread. The July 01/Oct 01 barley spread has moved from a small amount of carry relative to the July in early May 2001 to the July showing, as of the settlements on May 30, a $3.10/tonne premium (inverse) to the Oct. In the previous two years the July/Oct spread traded with $2.00 to $4.00/tonne of carry during the month of May.
The spread between WCE western barley futures and CBOT corn futures prices has shown significant volatility over the past few months, as it has in previous years. The currency-adjusted Dec 01 futures spread has ranged from approximately $19.00/tonne discount for barley in March 2001 to approximately $10.00/tonne premium for barley in May 2001.
