Prairie crop prices should stay firmer than normal for the next few weeks because of the bullish U.S. Department of Agriculture report last week, analysts say.
But few were calling for a big new leg upward in already-high markets.
“I think we’ll still have (at least) $10 canola even in the fall,” said John Duvenaud, the publisher of theWild Oatsmarkets newsletter.
“It’s a generally positive outlook.”
Usually, crop prices begin to decline in late summer as crops approach harvest, worries abate and the elevator system gets hit with new crop coming in off the combine.
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However, the usual seasonal weakness can be reversed by weather problems that threaten supplies, and that is the effect of the USDA Aug. 11 report, which estimated U.S. corn and soybean yields to be significantly smaller than expected.
The condition and acreage of the U.S. hard red spring wheat crop is also worse than expected, USDA and other analyses have recently suggested.
That provides a strong basis of support for present prices, but Union Securities broker Ken Ball said he thinks tighter corn, soybeans and wheat fundamentals would not necessarily drive prices much higher.
“That’s why we’re up here,” said Ball about canola prices, which are based on soybeans.
“We’ve been in a moderately tight situation with beans for over a year. The fact that we’re going to be possibly staying in a moderately tight situation is not enough to cause any great price action.”
Duvenaud said the tight U.S. and world corn stocks will keep feedgrain prices high everywhere, including the Prairies.
That means $4.50 to $5 barley is likely for the winter.
Spring wheat futures have been rising and those prices should feed back into Canadian Wheat Board Pool Return Outlooks.
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