Many prairie growers are hoping for a a nice spring feedgrain rally, but they might be disappointed, say feed marketers.
There is lots of old crop left, and spring might bring a new flow of damaged feedgrain.
“It might be limited by spring threshing,” said Jim Beusekom of Market Place Commodities in Lethbridge.
“There’s really no shortage of anything. There’s enough good wheat. There’s enough fusarium wheat. There’s enough barley to meet the demand.”
Brandon Motz of CorNine Commodities in Lethbridge concurred.
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“There’s going to be lots around into the new year,” he said.
Feedgrain markets have been weak since harvest with huge amounts of fusarium-damaged crops filling farmers’ bins and finding few aggressive buyers. When they are sold, it’s with a significant discount.
Beusekom said barley has been range-bound between $155 and $170 per tonne with the high hit in November. Present prices are around $160 or a little higher.
High fusarium wheat has ranged from $145 to $155 (delivered to the feedlot), while low vomitoxin wheat has traded for $170 to $185 with $180 being the current value.
Motz said he has seen offers of $165 per tonne for high vomitoxin wheat delivered for April.
He said the feed market will rise into spring, but the prospect of spring harvesting will keep a tighter cap on the seasonal rally than in most years.
“There’s a little bit more room for this to come up higher,” he said.
Prices were recently supported by reports of an export shipment of high fusarium wheat, which might have been used by grain companies for blending with cleaner grain.
Motz said farmers might be hoping they can blend off remaining poor quality crop with grain harvested this fall.
“If it’s not a problem (with fewer high fusarium crops next fall), maybe I can blend it down myself,” said Motz about a farmer attitude he has heard.
“Maybe I can get a 30 to 50 percent increase in value.”
That could be the reason why the amount of grain being offered has slowed.
“It’s getting harder to buy. It’s harder to source.”
Alan Johnston of Johnston’s Grain said the price decline last fall once the amount of crop damage became clear was dramatic. He recalls moving one farmer’s feed wheat for $3.50 per bushel in October with harvest still in full swing, but seeing the price plunge the very next day to $3.10 to $3.25 with a slow grind down over the winter to around $3.
Getting rid of damaged grain will take a long time.
“People will have this stuff around for a year,” Johnston said.
