Markets/Strategy

[charliep]

Any thoughts on the markets/strategy?

Not much to say on my side. Southern hemisphere crops progessing well as South America begins soybean and corn harvest. Not perfect but not bad either. Market starting to get focused on 2015 North Hemishere starting with seeding intentions.

Demand/consumption remains strong although nothing too exciting. Currency gyrations impacting prices as countries re-jig to reflect a sky high US green back.

Charts settled into a trading range. Quiet markets/low volatility may be opportunity to pick up some reasonably priced options. Lots of premium in spring prices to pay for cost of carry. Not much more from my side other than the boring everyday stuff of turning inventory into cash to pay bills/buy 2015 crop supplies.

[SASKFARMER3]

Heavy rains took some soy SA
Usa dry do winter wheat has 4 lives left
Putin alive
Snow going fast

[TOM4CWB]

Charlie,

1) grow less wheat... it has taken the biggest hit with the logistical problems and basis;

2) My better half Lucy always says grow more Canola...

3) Pulses look to be a winner,

4) still some flax... but acres down.

5) find another cereal specialty crop to bulk up and supply ... like einkorn.

[charliep]

Just curious how many are giving barley a second look - both feed and malt? New crop prices?

[charliep]

Growing crops that have local demand and don't rely on railways? Opportunities to move up the supply chain and add value to the crops you grow before you finally part with ownership?

[TOM4CWB]

Charlie,

Our Canola is totally local demand.

Pulses/flax have priority with transportation... and are being shipped by container when cars are short... at times.

[WiltonRanch]

How many barley acres can the domestic feed market absorb? Feed price is not bad compared to hrs if you can get enough yield but feedlots seem to be using more wheat to offset smaller barley crop. Seems $5 feed wheat at 50 bpa still pencils better than $3 barley at 60 bpa or even 70 bpa. Areas that can get 80 bu barley maybe but not my land.

[Braveheart]

Charlie, re barley: we are going to try barley this year. We are close to the ND border. We contacted two US companies about their malt programs and were encouraged by the conversations with both. We don't have a production contract or pre pricing. We are importing one of the US varieties favoured by both companies.

We tried CA elevators and malting companies and had hoped for better responses and attitudes. There was definitely concerns with transportation availability on the CA side.

[charliep]

Numbers I have seen to date would indicate a 5 percent plus/minus increase in barley acres this spring. Given the small acres/optimistic livestock outlook, I don't think the market will have any trouble in absorbing this acreage with whatever yield forecast you include. Your challenge is wheat feeding which will be a factor at least into next fall.

I am a little more optimistic on the feed barley price than the $3/bu. Running a $3.50/bu ($160/tonne) on a yield of 69 bu/acre (1.5 tonnes/acre) gives a gross of $240/acre. Assuming a CPS yield of 55 bu/acre (1.5 tonnes/acre) times your $5/bu ($184/tonne) grosses out at $276/acre but that assumes access to export market/transportation. If there is a lot of feed wheat or a transportation remains challenging, then I think the spread between the mid quality wheat price and feed barley would narrow. Feed barley more to feed wheat or vice versa - good question.

You have to put your own area in including closeness to feed markets and barley versus wheat yields/agronomics. I like feed barley just because I like a product I can sell locally. Wheat will be more of a wild card.

My two bits.

[Braveheart]

Charlie, good analysis on livestock/feed barley. That is our contingency if malt doesn't work.

[jake550]

And paying $100/ac rent still makes sense using those prices and yields?? I must be missing something.....

[charliep]

I notice WiltonRanch,

Would be an interesting question if treated as a feeder and considered yield as energy per acre and looked at the two crops in terms of cost of energy produced. At end of the day, that is what you are feeding livestock.

[charliep]

Actually will add in another factor. How many Canadian cattle will move south/will Alberta be competitive on a cost of gain basis?

Just looked at a outlook service I have access to. Their range on 2015/16 corn futures is $3.75 to $4/bu. Using the bottom end and a 75 cent over basis (worst case scenario) provides a USD $4.50/bu landed Alberta price or Cdn $225/tonne track. Cost of gain should keep calves north of the border. Having said, US buyers with expensive green backs will have a big advantage in both calves and feeders. You can add in the complexities including MCOOL from there in the decision about where animals are fed. Will have an impact on barley demand.

[malleefarmer]

news from china all good re barley especially feed

[Hopalong]

mallee, presume you mean good news for exporters?