2003 Feed Wheat South Alberta

[kslseed]

Hello, ned your opinion on pricing of feed wheat, weather permitting we will have 20-25,000 BSH 1/3 early August, 2/3 late August, how to market? Are $5.00/bsh possible?

[charliep]

I will leave strategy to others but will give my thoughts on range - likely $4.00 to $4.50/bu with the top end early August and the bottom late. That is based on good weather for crops in North America - problems and all bets are off.

What I will be watching:

1) US CBT corn futures have ranged from $2.35 to $2.50/bu. My thoughts are this price has room to come down with over a 10 bln bu corn crop (yields over 140 bu/ac trend yield) and cheap with a 9.2 bln bu or less. Conditions seem to be pointed to production at the upper end but the story hasn't been told.

2) Based on $2.40/bu Dec. CBT corn, a 73.5 cent loonie, basis of 25 cents/bu and Cdn $8/t trucking (rail to feedlot), the landed southern Alberta feedlot cost would be about $152/t. This will limit what the cattle industry will pay. The hog industry can pay more.

3) The demand side for feed grains gets interesting with BSE situation. Keeping animals on feed longer due to the closed borders/slow down in the packing industry will create extra demand short term. Depending on how quick/how the border opens creates some intersting scenarios for feed grain demand longer term. I will leave this question open to generate discussion.