MarketsFarm — Feed grain prices have firmed up ahead of seeding, and producers are quick to make room in feed bins ahead of seeding.
“New-crop price is significantly lower than old-crop, so at some point they’re going to converge,” said Allen Pirness, senior trader with Market Place Commodities in Lethbridge.
Statistics Canada’s crop intentions report, released last week, forecast an increase in acres for corn, barley and wheat.
“At some point the prices are going to converge,” Pirness said. “We expect it will be some time before early summer.”
Read Also
China suspends some agricultural tariffs on Canada
China said on Friday it would suspend some tariffs on Canadian agricultural products imposed during a trade spat between Beijing and Ottawa, after Prime Minister Mark Carney struck an initial deal with Beijing during a visit in January.
Current spot prices for corn and wheat are around $255 per tonne, while barley is around $260 per tonne.
Feed grain markets are caught in the crossfire of global trade relations between China, Canada, and the U.S. Statistics Canada data show Canadian wheat exports to China in 2018 jumped nearly 200 per cent over 2017 levels, thanks to the ongoing trade war between China and the U.S. However, in light of a soured relationship between Canada and China, grain producers are uneasy about the future.
“Our relationship with foreign buyers makes it difficult to anticipate great export numbers this coming year,” said Pirness.
“There’s concern when this relationship isn’t that great, it can affect everything.”
— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.
