Here we are in the first week of September. Harvest is well underway. Leaves are starting to turn, and winter is just around the corner. These are things that happen every year. The grain markets go up and down every year too. This year is different from what we have seen the last few years. You ask different how?
As an example, we traded $7.75 picked up barley in late July. Today September the 5th barley in the same general area is trading at under $5.30 picked up for next 2-week movement. The last 3 years we didn’t have this happen to any degree because the market was driven more locally than this fall.
The barley market is being affected by two main factors. First and most obvious, is that yields are way better in MB than anyone projected 6 weeks ago. I have had several producers talking about malting varieties yielding well over 100 bus/acre and have had colonies telling us yields of 120 to 130. These yields are more than making up for slightly lower seeded acres than in past years. The other elephant in the room is the US corn crop. Even though yields are not projected as record breaking there is the huge problem of the US and China trade relations. If the US can’t sell the volumes to China that they have in the past, the corn has to go somewhere. So that is where we come in, with corn bids running at $4.00 US X $1.34 to convert to CAN$ that leaves us with $5.40 CAN corn. Discount this by 12% for poorer feed efficiency in barley and you have $4.74 for what barley is worth. This is just an example of what could happen to our feed markets. This will be bad for growers but might help our feeding industry be profitable.
Another interesting crop is oats. I think two newsletters ago I mentioned I thought old crop oats might be a good crop to hold. For the first time ever it looks like I might be right. We have gone from $3.80 picked up to $5.20 picked up (milling oats). Nice return on investment. Just remember this could be close to the top. If you have a bunch in the bin and more in the field it might not be a bad idea to sell some. As always, selling into a rally isn’t wrong very often. Waiting to hit the top can be an expensive project. The markets DON’T CARE that you need a higher price. So don’t use that as your reason for waiting.
Flax has also shown some life in the last few weeks which is great. You can’t produce flax at $14.50 and have a good year. I have not talked to anyone with flax in the bin yet but it will be interesting to see how yields are. We have heard of 100 bus wheat and 30-bushel wheat. So much depends on if that rain cloud hit your land or not. In MB people are generally pretty positive about the canola crop but not much is harvested.
It would be great if we could get an update on what your yields have been. Just info for us, not for Stats Canada.
Lately, we have had many producers doing what I always suggest, they have been calling to get help with price discovery. We are always glad to help and it lets us know what you have so we can help you market it. Across the board September movement is filling up fast and many buyers are looking into October and later. We still have good demand for heated canola with very quick movement.
Until next month. Have a safe and profitable harvest.
Till next month,
Marketer - Brandon, MB
204-729-1354 - Office
204-761-8320 - Cell