Grain Today - October 2022
Good morning. Looks like all the prairies will have their first taste of winter. Tonight will be the first night we have had a real killing frost in Brandon since May. That makes my comments about possible surplus of feed grains because of frozen wheat look pretty off the mark. But as they say “Man plans, the Gods laugh”. The only thing that seems to be consistent in the world these days is extreme volatility in the markets. All commodities seem to be in the same cycle with feed grains leading the charge.
Barley prices gave up 30% from the highs in Feb/March to the lows in early August. They have increased 12% since then which really goes against normal markets. On a year like this with average crops we would think the prices wouldn’t recover until Jan/Feb when traditional demand pushes things higher. But right now it is a wait and see game. Who will blink first - buyers to get significant coverage or producers due to cash flow requirements.
We have traded $7.50 barley in Western MB and SE SK with higher prices working west. One of the things that is really impacting bids and movement is a lack of trucks. We are not short on the actual trucks, it is lack of drivers that is causing the crunch. There has been more demand for drivers from the oil industry plus there doesn’t seem to be new drivers entering the field. Covid was hard on drivers as well with all the restrictions that were put in place. As an example of how it affects your bottom line. Freight from Virden MB to the Lethbridge area was $45-$50/MT 3 years ago. It is now $70-$75 if you can find a truck with a backhaul, otherwise it's $100/MT. We have heard of shippers not being able to find trucks even when they say name your rate.
Another thing to remember is the impact of our weak Canadian dollar. If we were back at $0.80 instead of the $0.725 we are at today the prices would be considerably lower. Approx. 11% lower on exchange alone. But this is double edged as everything we buy is impacted negatively by the same amount. Have been hearing fertilizer is heading for the roof again with chemicals following right behind.
Enough doom and gloom. I was talking to an agronomist in the Alameda area who also happens to have been one of my clients for many years. He had some very interesting things to say about soil testing, especially in regard to issues with super dry soils not giving accurate results with nitrogen levels. I was very impressed with his explanation on how and why this works. He even managed to dumb it down so I could follow along. He is Edgar Hammermiester of Western Ag Labs. He is going to contribute an article on this subject to our newsletter (possibly mid month). We are also planning on having some breakfast producer meetings in Western MB and Eastern SK in November. Likely Virden and Redvers. Edgar will be speaking at them about Western Ag Labs and what they offer for services. This is just a heads up so you can be ready to fit breakfast in when we pin the dates down.
Another service we offer is our daily summary which is available (if interested please inquire about the free trial). Take a look at yesterday's summary and see if you think it might bring value to your operation.
As for commodity prices we have been seen Rye in Alberta trade as high as $9/bus for spring/summer 2023, barley prices closing in on $9.50 delivered to Lethbridge in the new year, strong demand for feed wheat and feed peas, and Yellow Peas and Green Peas showing some life with bids as high as $13/bus delivered to processing plants. Don’t be shy to contact any of us (list of brokers at the bottom of the newsletter) with price inquiries while keeping in mind trucks are at premium so plan out your movement before it needs to be gone yesterday.
Till next month.
Marketer - Brandon, MB
204-729-1354 - Office
204-761-8320 - Cell
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