Just a note to put people on alert about some issues that are emerging in the feed grain market. Lots of other things that have cattle producers attention but don't totally ignore what is going on in this arena. As users, you should be aware of the following.
1) Watch this Friday's statcan crop production estimate (keeping in mind the survey was done first week Aug.). 12 to 12.5 MMT would be reasonably neutral to prices. Over 12.5 and I think western barley will come down. Under 12 MMT and western barley will head higher.
2) The CWB pooling system hides most of this but you should be watching international feed barley prices. A combination of drought in Australia a year ago, the EU this summer and poorer crops in Russia/the Ukraine has resulted in tight supplies this fall. At the same time, both Japan and Saudi Arabia have monthly feed barley needs. Interational prices have responded by heading higher. Current prices off Portland are running about US $135/t. Won't write down the math to make this into an Alberta price but would equate to a price of Cdn $120 to $130/t if western Canadian farmers had direct access to this market.
3) Imported US corn has potential to work back into S. AB. rations this winter under the right set of circumstances. Two factors to follow - which side of the 10 bln bu the US corn is and whether the loonie is closer to US 70 cents or 75 cents.
4) Barley producer psychology and delivery patterns. Lots of people in this chat area wear both hats and realize the complexity of decisions that face managers this fall with regards to cash flow. An area I will be spending more time watching is basis - wide today but I think will pull back to more normal levels this winter.
No real recommendations other than to encourage everyone to manage risk. A part of this will be not to try to cover all feed needs at once but rather step up your purchases/hedging a piece at a time.
What are others thoughts on feed grain markets?
1) Watch this Friday's statcan crop production estimate (keeping in mind the survey was done first week Aug.). 12 to 12.5 MMT would be reasonably neutral to prices. Over 12.5 and I think western barley will come down. Under 12 MMT and western barley will head higher.
2) The CWB pooling system hides most of this but you should be watching international feed barley prices. A combination of drought in Australia a year ago, the EU this summer and poorer crops in Russia/the Ukraine has resulted in tight supplies this fall. At the same time, both Japan and Saudi Arabia have monthly feed barley needs. Interational prices have responded by heading higher. Current prices off Portland are running about US $135/t. Won't write down the math to make this into an Alberta price but would equate to a price of Cdn $120 to $130/t if western Canadian farmers had direct access to this market.
3) Imported US corn has potential to work back into S. AB. rations this winter under the right set of circumstances. Two factors to follow - which side of the 10 bln bu the US corn is and whether the loonie is closer to US 70 cents or 75 cents.
4) Barley producer psychology and delivery patterns. Lots of people in this chat area wear both hats and realize the complexity of decisions that face managers this fall with regards to cash flow. An area I will be spending more time watching is basis - wide today but I think will pull back to more normal levels this winter.
No real recommendations other than to encourage everyone to manage risk. A part of this will be not to try to cover all feed needs at once but rather step up your purchases/hedging a piece at a time.
What are others thoughts on feed grain markets?
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