Winnipeg (CNS Canada) — Following a winter of tight feedgrain supplies that sparked a price rally in Western Canada, prices are starting to back off.
“It’s been breaking free a little bit. Kind of surprisingly this year it took till seeding time to see that happen. We’ve seen markets rally right up till May,” said Jared Seitz, trade manager with Agfinity Inc. in Stony Plain, Alta.
Throughout the winter, prices were high, with feed barley sitting at $265 to $268 per tonne. Now a few weeks later, prices have fallen by $10 per tonne. According to Seitz, prices usually hold steady during seeding but that isn’t the case this year.
Feed wheat prices are seeing a similar story, according to Seitz. Around the Lethbridge area, prices have fallen about 10 cents to $6.70 to $6.75 per bushel. However, in the Calgary area, prices are staying strong near $6.30 per bu.
Seitz expects feed wheat and barley prices to stay supported throughout the summer, especially for barley because supplies are starting to dwindle.
“The buyers that don’t have (supplies) covered for June, July they’ll probably end up having to pay up, come up to (the sellers’) asking price. And then we could see things correct in a bigger way when prices converge with the lower new crop levels,” he said.
At Agfinity, Seitz said they are warning buyers not to sell too far out. They are telling producers to price no later than the first half of July and if there hasn’t been the rally by then, producers should take the best price they can get.
Buyers are also starting to look toward the new crop with a few offers already out there.
“Every buyer is going to be watching the harvest times quite closely this year. It’s going to be a bit of cat and mouse with the price for August,” Seitz said.
For new crop barley at Agfinity in the Lethbridge area, prices are between $220 to $225 per tonne. New crop feed wheat prices aren’t as high as elevator bids for graded wheat. Current bids are between $5 and $5.50 per bu.
“We haven’t traded much for new crop feed wheat but a fair bit of action with new crop feed barley. So, kind of expect those, at least the off-combine market to weaken here sooner than later over the next month,” Seitz said.