Feed market price bounce stalls

Mike Jubinville

Highlights

  • Prairie cash bids for feed barley appear to have stabilized
  • There's more competition this year from increased supplies of lower quality wheat and durum working into livestock rations
  • Barley growers should be patient and look for local specials for the next selling opportunity

Prairie cash bids for feed barley appear to have stabilized. That's after back-tracking slightly in the past one to three weeks after bouncing up from their September lows.

Lethbridge cash barley bids are reported around the $170-a- tonne level, down from the fall season high of $175 to $178 a tonne, though still up from the harvest lows of $150 a tonne.

Inclement weather conditions in October slowed producer deliveries, but buyers have filled up on near-term feed needs and are not really looking to buy more at the higher values we saw trading a few weeks ago.

Plus, there is a heightened competition this year from increased supplies of lower quality wheat and durum that worked its way into livestock rations. Remnants of higher fusarium or vomitoxin grain supply will continue to linger through the feed chain for a year or longer.

Inclement weather conditions in October slowed producer deliveries, but buyers have filled up on near-term feed needs and are not really looking to buy more

Feedlot cattle placements have improved, promoting stronger domestic feed demand in October, but bear in mind that feedlot inventories reach a seasonal high in December.

Also, the steady stream of fusarium-damaged wheat continues to flow into Alberta feedlots, giving ranchers a variety of choices on what they can give to their animals, which holds the price of feed barley in check.

Since a higher percentage of Alberta feed consumption this winter will be spring wheat and durum imported from Saskatchewan, expect random $10 a tonne local price spurts on any periodic winter disruption to transportation logistics.

Also, there is no sign of a feed barley export program to leech off supplies, so I think we are looking at only a seasonal bounce for the feed barley market.

Recent underperformance of the United States corn market also has me a bit concerned about the immediate feed grain price outlook between now and Christmas.

With little expectation of a sustained move higher in price trend for now, barley growers should be patient and look for local specials, logistical disruptions or wait and hope that the 2017 growing season presents new market opportunities on stressed crop conditions.

Mike Jubinville of Pro Farmer Canada offers information on commodity markets and marketing strategies. Call
204-654-4290 or visit 
www.pfcanada.com to find out more about his services.

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