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Good day,
It looks like most of the prairies have received rain, just 6 weeks to 2 months too late. Large amounts in some areas (5-7 inches) other areas are more reasonable. I guess this will have to be viewed as a next year's rain. Isn’t that farming, always next year. It has been an interesting ride in the markets the last month. I am sure it isn’t making it easier to decide when to pull the trigger on a sale. It seems just these last few days that some of the early panic has left the buyers and now they are buying for further out. I hope this doesn’t offend anyone that has a really poor crop, but the general consensus is that yields are better in the pulses and cereals than expected all across the prairies. There are some areas that have been really kicked hard with single digit yields but over all there is still crop to market. From our conversations with buyers, they are pleased with the number of producers that have been able to fill their new crop contracts. This has taken the pressure off of buying for short covering. We have seen prices in all commodities back off for the nearby and slightly better interest for Oct forward. I could list all the prices we have been trading but since it is so volatile it wouldn’t really help you. And I hate typing. Best thing is fire one of us a text or call and we will help you with current pricing. I have 2 things I would like to address. #1: The feed markets. We keep hearing rumors about barley trading at $11 delivered Lethbridge and feed wheat at $11.50 picked up in Western MB and Eastern SK. I am not going to call BS on these prices. I will just say that we haven’t found a buyer paying those prices anywhere and if someone offers you those prices make sure you do your due diligence as far as buyers’ credit. It would not be fun to sell your $11 barley for $0 in the end. As a side note, even if we aren’t involved in the trade and you are having doubts about the buyer, contact us and if we know the buyer and his payment history, we will tell you. Good or bad. We don’t want to see anyone burned during these crazy times. #2: Why feed barley and wheat DO NOT have unlimited upside. Let’s do a bit of math. e.g. Feed barley that is sold for $8.00 picked up at Redvers SK will cost a feedmill $8.55 by the time it gets into the Red River Valley ($393/MT delivered). The same feed mill can buy US corn for $360/MT delivered. Corn is at a minimum 10% more efficient feed than barley. It doesn’t take a rocket scientist to see that corn will cap barley and feed wheat prices likely at lower levels than they are trading today. The only problem with this is logistics of moving corn but I know of at least 2 companies that have corn bought for delivery into MB and Lethbridge AB by rail. At the above prices. The spread is so big that there will be significant volumes moving. So keep this in mind if you do have a legitimate $9.00 offer for your barley. You might think it will go to $10 but do you want to bank your entire returns on that. That is it for my rant this month.
Until next month. Be careful as you work at harvest and stay COVID safe as well. We are getting closer to the end of this mess but not there yet. Richard Chambers Marketer - Brandon, MB 204-729-1354 - Office 204-761-8320 - Cell richard@qualitygrain.ca Comments are closed.
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November 2023
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