CNS Canada — Cash barley prices have begun to weaken in the key cattle feeding area of Lethbridge, Alta., as feedlots have shipped out many of their animals for the season and demand for feed starts to decrease.
According to Jim Beusekom, grain broker at MarketPlace Commodities in Lethbridge, current delivery prices are around C$200 per tonne, down from last week’s high of $215.
It’s the second year in a row that prices peaked during the May long weekend, he said.
“So far this year it looks to be the same thing, this is the first week we’re down since February in any big way.”
Many of the logistics problems still haven’t gone away; much of the grain is still located outside the area and finding trucks isn’t easy, he said.
Going forward, he said, he expects things to loosen up as feedlots haven’t replaced many of the animals that were shipped out. Smaller calves have also mainly gone out to grass now while the bigger ones have been sold.
While prices may have fallen below the previous month’s high, they are still higher than expected, he said.
“(If) truck logistics were different than what they were today, if there were enough trucks around, we wouldn’t be anywhere close to this price.”
Feed wheat also joined feed barley on the run higher through April and May, according to Beusekom. That’s due in part to the fact that Kansas wheat futures at one point were US$8.50 a bushel, he said.
“And that’s only a few weeks ago that they were that high; since then they’ve come up a dollar a bushel.”
As a result, he said, little feed wheat is making its way to the U.S. right now.
“It doesn’t make sense right now, with wheat futures down US$1 a bushel. Essentially about $40 a tonne, it’s taking away all the fun in exporting feed wheat to the U.S.”
Contracts are still present, he added, but no sales are being made.
Barley and corn have helped push the feed market higher, but it’s really wheat that has driven the market, he reiterated.
Things are expected to get quieter now that seeding is underway, he said.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.