CNS Canada –– Seasonal harvest pressure is starting to weigh on feed grains in Western Canada, while quality downgrades to crops still on the field may put further pressure on values going forward.
“There are quite a few bearish indicators out there,” said Kyle Sinclair, of CorNine Commodities at Lacombe, Alta.
For starters, early yield reports are coming in well ahead of expectations in Alberta, with quality and bushel weights also surpassing earlier ideas, he said.
While drought conditions lowered expectations on the size of the crop and boosted prices over the summer, he said the better harvest results were changing the end users’ mindset.
A large amount of moisture hit Alberta over the past weekend, which halted harvest operations and stabilized prices for the time being, said Sinclair.
However, that rainfall is expected to weigh on feed prices in the long run, as more of the wheat crop will likely be downgraded to feed quality.
“There is definitely some concern for the producer right now (that they) will see grade disappear.”
Sinclair estimated up to 50-70 per cent of the grain crop was still waiting to be harvested in Alberta.
The third factor weighing on barley is the weaker Canadian dollar, limiting corn imports from the U.S., but also encouraging cattle exports to the south, which in turn cut into the domestic barley demand, he said.
Looking ahead, he said, the best prices might be right now, as he was skeptical whether the typical post-harvest rally would materialize in November/December this year.
If farmers do decide to wait for better prices, “they need to be in a position to hold out until the springtime.”
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.