MarketsFarm — Tight old-crop supplies and mounting weather concerns over new-crop production are keeping feed grain prices well supported in Western Canada as end-users work to ration supplies.
“We’ve seen a very real weather market emerge in the last few weeks,” said Brandon Motz of CorNine Commodities at Lacombe, Alta., pointing to wet conditions hampering corn planting in the U.S., and drought concerns on Canada’s Prairies.
“The problem is not just that we’re dry, but in the past few years we’ve used up a lot of the subsoil moisture,” said Motz. “We need a fairly substantial rain event to make the drought fears disappear; otherwise we just kick the can down the road a bit.”
Forage supplies were already tight last year, adding to the problem as some grain crops could end up being cut for green feed if the grassland suffers again.
Meanwhile, a record number of cattle are on feed in Canada, added Motz.
Barley delivered to Lethbridge is currently trading as high as $290-$295 per tonne, according to Motz.
That price, he said, was near an all-time high for Lethbridge, last seen in 2013 when there was a similar run up.
“We’re running tight supplies on everything,” he said. “We don’t have a lot of barley left in the country.”
Feed wheat stocks are also tightening, with Lethbridge pricing in the $275 per tonne area. Corn delivered into the region is going for $280-$285 per tonne, although Motz said there were not many new offers on corn.
“I think we’ll be able to scrape by,” he said of the tight feed situation, adding that feeders need six to eight weeks until new crop starts coming in.
While extremely dry areas will likely cut into new-crop production, Motz said many areas were still in good shape at this early stage of the growing season.
— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.