Watch Feed Grains Prices

[charliep]

Feed grain prices have remained flat right into the fall but they are starting to look more interesting this winter (at least if you are a grain producer).

My barley supply demand estimates for 2006/07 show July 31 2007 carryovers moving under 2 mln tonnes. Reduced crop size. CWB only exporting malt barley. Domestic maltsters getting their 1 mln tonnes. Even with the 11 bln bu US corn crop, next years carryovers will be cut in half from the current year reflecting ethanol use. This should create some better pricing opportunities through the winter.

Higher quality wheat crops will mean less feed wheat available and likely blending opportunities with old crop. Not the mountain of 3CWRS and feed wheat sitting over top of the market as compared to the last 2 years.

My sales priorities off the combine would be oats, wheat (as much as the CWB will allow under contract calls and using the producer pricing options). Canola would be in the neutral zone/delivery of what I have contracted to date. Anything related to the feed side (barley, feed wheat and peas) and I would be more patient.

What are others thoughts and strategies?

[grainboy]

just curious, when you say patient what tye of prices do you see on your barley & peas?

[charliep]

Always hate when some pins me down on a forecast but here goes just to make things interesting (hopefull someone else will provide their thoughts).

I think feed barley will hit $3/bu ($138/tonne) at different points in time this winter delivered feedlot southern Alberta. That would put farm pickup Calgary - Red Deer corrider at $2.50/bu ($115/tonne) and likely close to $2.25/bu central Saskatchewan. You can look at current prices at the AGC website (http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agc5474).

I am less comfortable on peas but would suggest feeds to the local market at over $3/bu and edible prices over $4/bu. You will ask me how much over and I will do the civil service soft shoe. Again, it will be strong movement/good sales opportunities that pull prices higher.

[IAMTHEMOLE]

2 WEEKS AGO i SPOKE WITH A CORN DEALER OUT OF MINNESOTA. aT THE TIME SEPT. 06 CORN WAS TRADING AT 2.4/BU. HE OFFERED $117/MT FOB TRACK cALGARY OR lETHBRIDGE. ASSUME $10/FREIGHT AND TRANSLOAD , GIVES YOU 127/DEL FEEDLOT. SINCE THEN THE MARKET HAS DROPPED. IF BASIS IS THE SAME NOW AS WAS THEN, THAT CORN WOULD TRADE AT $108 FOB TRACK.

I AGREE THAT BARLEY PRICES HAVE NO WHERE TO GO BUT UP FROM HERE, ROUGHLY 2.20/BU DEL CALGARY, BUT CORN COULD KEEP A LID ON IT. AS WELL, DEMAND IN ALBERTA FEEDLOT ALLEY HAS BEEN LACKLUSTRE AT BEST AND WITH ALL THE FEEDER ANIMALS SHIPPED OUT THIS PAST SPRING IT WILL TAKE A WHILE YET TO IMPROVE. MOST LIKELY SOMETIME IN FEBRUARY TO MARCH07.

[rain]

IAMTHEMOLE. Your numbers seem awfully low for US corn. I am wondering if you are missing the exchnage rate which would add about$10.00/MT to the levels you have posted?

[charliep]

Also checking on your US corn price (landed Alberta). What volumes are involved (single car or unit train)? Is it backed up by longer term business?

I note December CBT corn futures close today of US $2.37 1/2. I am going to assume a basis delivered tract Alberta of 25 to 30 cents/bu (not too far off your $10/tonne but in US dollars). I would think (stand to be corrected) that to get basis this low, the deal would have to involve unit train volumes (or at least 50 car business). That would put track Alberta at Cdn $115/tonne. You can add on $10/tonne to move it to a feedlot.

Implications for others - It is possible that 2006/07 could be a year that Alberta sees corn imports again. I note that this corn will have to pass a lot of US ethanol plants before it gets here. I note a lot of the long term US corn importers are not going to back away from the market either.

[IAMTHEMOLE]

THAT QUOTE WAS FOR A 25 CAR TRAIN. THERE WAS NO MISTAKE. WAS IN MINNESOTA THIS WEEK, CASH PRICE DELIVERED ETHANOL OR TERMINAL 1.71/BU.

[IAMTHEMOLE]

Welcome to the world of a 90 cent dollar.

[WRAPper]

I believe it's high time that Alberta Ag. institute a program where it's staff members spend their weekends in Harvest taking Beer and or Slurpees to the farmers out combining.
This gem of an idea came to me whilst I was unloading a load of itchy barley this afternoon.
Lee can do south of Red deer and Charlie North.

[IAMTHEMOLE]

I forget the exact day I spoke to grain dealer. but Sept corn was 2.4/bu (us dollar). As well, I have never purchased corn from them before, they are just a contact I use for comparing to our domestic feed prices. Price was 2.65 us/bu delivered track southern alberta. I can transload all day and deliver to our feedlot within 25 miles for a $10.00/MT fee.

[IAMTHEMOLE]

Wrapper, What is your barley yielding? Is it feed variety or malt?

[IAMTHEMOLE]

I forget the exact day I spoke to grain dealer. but Sept corn was 2.4/bu (us dollar). As well, I have never purchased corn from them before, they are just a contact I use for comparing to our domestic feed prices. Price was 2.65 us/bu delivered track southern alberta. I can transload all day and deliver to our feedlot within 25 miles for a $10.00/MT fee.

[melvill]

Hey, WRAPper, I was eating dust this past weekend, too. Combined one field of AC Lillian that yielded about 26 or 27 bu/ac. Field right next to it the field was 1/2 Lillian and 1/2 AC Abby. Yield was 14 or 15 - due to unavoidable problems - seeded two weeks later

Most noticeable, though, there was a noticeable difference in appearance of the Lillian - fewer shrunk kernals - compared to the Abbey in the same field.

Boy, could I have used a slurpie while I hauled grain. My city-nephew - planner for the City of Calgary - ran the combine.

[rain]

IAMTHEMOLE remember however if you order the 25 car spot delivery could be anywhere inside a 5 day time frame and you will most likelely only have 2-3 days to move it. Switching to corn is not for the feint hearted.

[IAMTHEMOLE]

If one were to switch to corn you should have more than one source feeding your pipeline. I think it is early yet to consider switching to it.
The main execise here is that barley will not rally without a rally in corn. If it does get too far out of whack, some will change. Much more affordable with a 90 cent dollar versus a 65 cent dollar.