Feed wheat cash bids in Western Canada have been holding at fairly steady levels, although there are ideas values will need to strengthen in order to meet domestic requirements.
“There has been a fair amount of downward pressure on feed grain values, particularly from the sell-off in CBOT corn futures as well as from depressed world feed wheat values,” a cash dealer said, requesting that his name not be used.
However, keeping domestic feed wheat values firm has been the harvest of a higher-quality Canadian crop and strong domestic demand.
“Essentially, 90 per cent of the Canadian wheat harvest was of higher-quality wheat, with 10 per cent or roughly two million to 2.5 million tonnes consisting of feed wheat,” the dealer said.
“Domestic demand, meanwhile, was expected to be in the three million to 3.5 million-tonne range, with about 800,000 of that seen going to the ethanol sector.”
What’s likely to happen, the dealer explained, is that feed wheat domestic prices are eventually going to have to climb further in order for the end-users to cover requirements.
“In order to keep producers from delivering to the CWB, the domestic price will need to be attractive enough to prevent that from happening,” the dealer said.
Cash bids for feed wheat of around $4.50 a bushel in Alberta were already pretty good, but there still should be a further improvement, he said.
The dealer cautioned that once values rise, they may not remain at that high too long, as producers at some point will decide to take the higher price and “run to the bank with it.”
Cash bids for feed wheat delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data, currently range from $3.45 to $3.81 a bushel, in Manitoba from $4.18 to $4.20 and in Alberta from $3.51 to $4.57.
In the middle of December, cash bids for feed wheat in Saskatchewan were $3.25-$3.81 a bushel, in Manitoba $4.18-$4.33 and in Alberta from $3.54 to $4.60.