AAFC 2005 Corn Imports?

[rain]

Charlie do you have any idea of what % of corn that is imported into Canada is used for feed? AAFC has dropped forecasted imports to 1.8 MMT from 2.00 MMT a 6% drop. If corn prices stay at the current lofty levels I would think corn use for animal feed will be very low.

[TOM4CWB]

Rain;

I DO NOT AGREE...

Just like fuel for your tractor, the price going up does not stop you from working... and burning more fuel.

In fact with increased cattle and hog inventories... we may use more not less...

If the CWB will not allow competitive cash pricing on lower grades of wheat and barley... a reduction in production is likely.... the risk of CORN imports rises... as drought risk is very real on top.

$3.00/bu corn is now a reality in the US, but what do you expect the CDN$ and CDN feed grain prices to do... stay low?
I guess grain growers will be required to hold up the livestock sector with cheap feed... is what AAFC is saying... is it not Boone?

No wonder why they won't allow fair realistic cash prices for our lower grade CWB grains... the gov. couldn't control grain stocks in Canada any more.

[rain]

Tom for the sake of arguement lets keep corn prices at $170.00 delivered. Would you sell wheat for $153.00?

Lets assume CPSR acres are even lower then last year and the quality of the HRSW crop is again better then normal.

With $170 corn you can go to about $136 delivered barley add some enzymes and you have a corn wheat substitue.

Tom it is important to know how much imported corn is used for livestock feed and how much is used for all other uses.

[boone]

Tom4cwb: Any group that thinks poor marketing prospects will be a constant, needs a good wakeup call, but generally freight out of northern Alberta and eastern peacecountry is subsidized, so real cost isn't exposed. True cost of irrigation in south isn't either. Yet we need to accept that there may be hog barns closed permanently, due to U.S. countervails. And yes I understand just how ridiculous their case against us is.

[rain]

Tom forecasted spring wheat acres are expected down another 1.5 million acres in the US again this year.

[charliep]

The 1.8 MMT would be about 1.5 MMT imported by eastern Canada and 200,000 to 300,000 tonnes into Manitoba. The latter is for the livestock and poultry industries (high energy rations) and the size, quality and level of DON (micro toxins from fusarium head blight) in Manitoba crops.

Western Canada/Alberta is not short barley today to meet livestock feeding needs. Similar comments can be made on new crop although acres/weather will have major impacts this summer.

Where western Canadian farmers might see impact from the US market is in export opportunities (if we had an effective open market). Stockton California (dairy area) prices are running about $190/tonne. Haven't checked the rail rate recently but I suspect would be close to working.

[charliep]

Just as a note, Ontario is quite happy being a corn importer. It fuels their value added industries and results in some of the highest corn prices in North American (US mid west plus cost to ship to Ontario).

[TOM4CWB]

Rain;

I will take the $153/t CPS with open arms...

The Canadian dollar has a huge impact, as do ocean shipping rates...

There are very big unknown factors... hence the huge rise in WCE Western Barley and Feed Wheat contracts.

Last year at this time, a $4.25/bu feed wheat contract could have been done with a $153/t Dec 04 feed wheat contract.

But will anyone pay up this year?

SO where exactly are we at on hedging Central Alberta feed grains for the fall?

[rain]

First we see how much barley actually gets seeded. Down here we have seen CPSR red acres go fro 1/3 of the wheat seeded to maybe 5%.

The amount of actual barley seeded will be the linch pin in the whole feed grain market this coming year in Western Canada.

[Incognito]

Tom:

An 8 under WCE December wheat was signed last week in Alberta delivered SW corner.

Not your $153.00 but $146.50 ($3.99/bu)pencils in quite nicely.

[rain]

This time last year producers where booking -2 to option delivered the wheat futures delivered Calgary region.

Tom try not to be to bearish. Maybe this is the year to watch and wait for thefeed market to come to you.

[TOM4CWB]

Rain;

The only way corn exports could rise... is if barley and wheat prices are high in the latter part of 04 as well...

CWB Market choice will be needed for higher prices for this year... but a certain mentality has already entered the public domain... it is now inevitable.

[rain]

Tom I have know idea what you just said.

[charliep]

Just a note I am not necessarily that negative on feed grain prices. Just a note that there are a number of factors at play (not all positive for prices). A value added industry I do have concern for is the malt sector with none of the proper new crop signals able to get through the CWB fog factor.

[crusher]

Charlie,

Are you suggesting barley (malt) could be a sleeper because the new crop PRO on select is so low? How do I justify/handle the risk of planting malt type barley vs CPS that I can book at $3.75? I hadn't planned on any barley acres yet, even though they are usually 10% of our acres.