Some of the best harvest time prices are gone, but farmers should see better prices in the winter, some analysts think.
There are few easy marketing choices for producers who don’t want to wait.
“Generally the slant of these markets is to go higher over time,” said market analyst Errol Anderson of Pro Market Communications. “For most crops, store them if you can.”
Wild Oats Market Advisory analyst John Duvenaud said canola and canaryseed prices were attractive at harvest, but have now fallen.
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“The bloom has come off of the rose,” said Duvenaud.
While there are no bonanza prices for farmers to grab right now, analysts say producers should be moving crops that will be harder to sell later in the year. Hold on to the crops with the best prospects and sell those that don’t, analysts said.
Statcom Ltd. oats market analyst Randy Strychar said farmers should try to sell some of their oats before the Scandinavian crop starts coming.
“I would move that right now,” said Strychar.
“Any grower who thinks he is going to hold the Americans to ransom has another story coming.”
Some commercial buyers have been offering $1.95 per bushel, and that could rise to $2.05 or $2.10, but once the Chicago oats futures price hits $1.60 to $1.65 per bu., Scandinavian sellers will pounce.
“They will flood the U.S. market with oats,” said Strychar.
Canadian farmers have a big crop, so finding a home for 30-40 percent of a farmer’s oats crop is a good idea, Strychar said. Fighting later in the season with Scandinavian imports wouldn’t be fun.
Anderson said it would be wise to start selling feed grains now because of the continuing cattle trade problems due to bovine spongiform encephalopathy. Over time, demand for barley and other feed grains should improve, but right now feedlot operators are not buying much as they watch to see whether the U.S. border will reopen.
“I can see the feedlots starting to fill up and barley prices starting to improve, but that’ll be in 2004,” said Anderson.
Any farmer who needs to sell some grain now to pay bills could try barley. Since his outlook is for higher feed grain prices in the winter, Anderson said farmers could get cash now by selling some grain but protect the upside by buying corn call options.
“If they can find a market for it, move it and replace it on paper,” said Anderson.
Selling canola now doesn’t make sense. Basis levels are wide because of heavy wheat deliveries into the grain elevator system, and “the strategy for wide basis levels is to store it on the farm,” said Anderson.
The canola basis could improve by about $10 per tonne, and that’s worth waiting for, Anderson said.
“If they can park it, park it.”
There may not be any great opportunities for farmers to sell their grains this autumn, but Duvenaud said those who need to sell won’t be taking a bath.
“Prices aren’t great but they aren’t terrible either,” said Duvenaud.
And as the crop year progresses, things should improve.
“I think it’s going to be not a bad year,” said Duvenaud.
