CNS Canada — A rise in U.S. corn prices has helped lift the entire feed market in southern Alberta, though one industry expert says it isn’t the only factor strengthening the market.
“Barley is getting increasingly difficult to buy as we clean up old-crop supplies,” said Allen Pirness of Market Place Commodities at Lethbridge.
Cattle feeders were turning more and more to corn and wheat as a result, he said.
Feed wheat is still readily available, but Pirness said regular wheat sales are slowing down for two reasons.
For one, sellers are keenly watching what’s happening with Kansas City wheat as drought in the U.S. Plains creates ideas this year’s crop could be much lower than normal, which would lead to a rally in price.
“The bad performances by the (Canadian) railways this year also means the elevators can’t ship enough wheat to port,” he said, noting some of it was moving into the feed market via farmers who wanted to take advantage of the prices.
Many other farmers were holding back wheat sales in the hope of higher prices down the road, Pirness said.
Prices for barley and corn are now hovering around the $240 per tonne mark, while wheat was close behind at $235, roughly $20 higher than last month.
One reason buyers like corn so much is the available supply, he said; an operator can pick up the phone and buy 10,000 tonnes, whereas with barley they can sometimes only get 40 tonnes with 10 phone calls.
Going forward, he doesn’t see a price pullback coming anytime soon.
“At least until we get some better definition on the (U.S.) winter wheat crop, I think that will tip the balance,” he said.
If a break does come in wheat futures, it could push barley even higher as it will be tougher to buy wheat in Western Canada.
He hopes the current situation will encourage Prairie farmers to seed more barley this spring, “because there is a good return right now.”
— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.