 Happy New Year everyone!
Hopefully everyone had a healthy and productive 2021 and can build on the positives and set the negatives behind for 2022. It was a roller coaster ride for many seeing extremes in both dry and hot weather impacting yields across Western Canada. I figured I would take a moment and do a high level Review on the Commodity Pricing we had seen for 2021. I randomly chose prices/locations in the middle of each month for commodities we traded the most throughout the year. Hopefully these charts are legible (formatting is always difficult). Red Lentils had an incredible run peaking in October at $0.50/lbs. I have had many buyers suggest they predict red lentils are going to continue to slide and settle in the $0.30/lbs range while producers are adamant they will be over $0.60/lbs Yellow Peas have been a wild ride. Off the combine in 2020 at $7.50/bus climbing to $8.50 by New Years, peaking in February at $10.75/bus, and bottoming in June at $9.75/bus. Off the combine in 2021 we were seeing $16.00/bus and then again climbing up to a peak in November at $18.00/bus Green Peas have followed a similar trend to Yellow Peas but have been lagging in value since January. Low of $8.80/bus and high of $16.50/bus. Hearing many producers are bullish on Green Peas for 2022, so we will wait and see what the market brings us Milling Oats were pretty steady from January until June around $4.00/bus. We had a pretty significant run up from June peaking in December at $10.50/bus FOB Manitoba but as mills fill up it appears the price is settling down in the $9.00-9.50/bus range (not shown on this chart but rather bids to finish off December) Barley and feed wheat have followed each other on a per ton price basis for the last 12 months. I honestly thought we were going to see peak pricing in August after the initial panic from the crop failures seen in Eastern Alberta and Western Saskatchewan however, par for the course, I was incredibly wrong with my prediction. Barley appears to have peaked in November around $9.40/bus right before Corn was being railed up in major quantities. Since the peak it has settled around $8.50-9.00/bus (dependent on location). Where it goes in 2022 is anyone's guess (hopefully their crystal ball is more reliable than mine) Feed Wheat peaked at $12.00/bus and has since settled in the $11.25-11.50 range coming into the New Year. We traded $443/MT FOB out of Brandon MB at the start of December and seeing $422/MT (Brandon MB) to close out the year Rye has been a hot and cold commodity, typically lagging the market and leaning towards cold. Corn and Rye are the only two commodities on our charts that did not eclipse $400/MT. Highest Rye pricing we have seen was $10/bus picked up spring 2022 but most producers don't want to wait that long to move it. So they will wait instead. Interesting strategy and we will see if it pays off Corn was trading neck and neck with barley and feed wheat from January until June but has since been severely out paced peaking in September (before the combines were rolling) at $9.15/bus. We have seen a small rally in December selling corn for just over $9.00/bus picked up If information like this is interesting to you I would suggest subscribing for an annual membership to the Quality Grain Daily Summary showing where bids are coming in and what is being traded on a day to day basis. This also includes a login to the website to view historical bid sheets. Price is $125 + GST for an annual subscription. See link below to sign up: https://www.qualitygrain.ca/store/p2/Quality_Grain_Bid_Sheet.html Or give me a call/email and we can go through the details directly. Thanks everyone for supporting Quality Grain Marketing in 2021 and we look forward to doing business with you in 2022. Whether it is brokering a deal or price discovery we are here for you. Reed McDonald Marketer/Owner - Calgary, AB 403-380-5044 reed@qualitygrain.ca Good day,
One of the things we as brokers/marketers are continually asked this year is “when do you think this run will end?” Unfortunately, our crystal ball is very cloudy currently. All we can do is relate to you the trends we have seen in the past few months and what seems to be the trends at this time. If you have been asking me this question over the last 18 months, I will have proved conclusively that I can’t foresee the future. We are always happy to give you our thoughts. This has been an amazing ride. The general trend seems to be always up with some crops outperforming others significantly. Oats are an example. Today we are at double some of the best prices we had ever seen until now. Anyone who said last March that we would see $10 oats in western Canada would have been called crazy. Just for a bit of context regarding world prices. Good quality milling oats are trading for 200 pounds/ ton in Great Britain. This works out to $5.80/ bushel CAN. (Sorry John this is just too valuable info to not share). As you can see there is room for a price correction no matter how high ocean freight is. And we are seeing oats moving in from offshore currently. The scary part of these prices is that they seem to be driving suppliers to charge unreasonable prices for next years’ inputs. I am not saying that your local fertilizer dealer is the bad guy here. He has no more control over his costs than you do. BUT someone is taking advantage. Just my thoughts. As mentioned we are seeing very strong prices. Milling oats $9.50 to $10, pearling quality barley was $9.50 to 9.80 - those bids have backed off. Feed barley 8.50 to 9.00. We are hearing that malt barley that has been rejected is starting to flood the feed market pushing the prices down. Feed wheat $11.50 to $11.75, Flax $36 to $42, yellow peas $17.00 to $18 (demand from the USA has been declining). These are just generalizations you need to give us a call, email or text with grading info and we can get you firm bids for your corner of the country. If we can help in any way with price discovery don’t hesitate to call any one of the marketers on the bottom of this newsletter. Until next month have a safe and happy Christmas whether you stay home or travel to a more exotic destination. Richard Chambers Marketer - Brandon, MB 204-729-1354 - Office 204-761-8320 - Cell richard@qualitygrain.ca Good day,
It has been a wild ride on the markets again this month with almost all commodities making gains from the first of October. The only thing this year has proved is that every year is different. I thought we would see a correction by now, but the trend is up. Many producers are starting to use the highly successful strategy of “just wait, it will go up”. So far so good. Unfortunately, I don’t see this as being the long term new normal. No one seems to have any idea when the run will end. If it is the new normal, we will be dealing with mass starvation in poorer countries and double-digit inflation. Producers are already experiencing some of that with the massive fertilizer and chemical price increases and the difficulty in acquiring new equipment. But on to more pleasant topics. We are seeing bids of $11 for feed wheat, up to $9 for feed barley, $9.75 for glyphos free 2 CW oats (all Western MB) and $45.50 flax (Shaunavon SK). One of my clients in the Brandon area sold #2 CWRS wheat for $11.50 delivered. Looking in from the outside I would think that these are prices that should generate some sales, at least some % of what is left in the bin. Back to one of my favorite hobby horses. Please be sure you have good bin samples of what you are marketing. Commodities like lentils or green peas should be graded by an independent grader such as Intertec or SGS. Then both you and the buyer can be comfortable that what is loaded is what the buyer is expecting to unload. It is never a good situation when 43 MT is sitting on a truck $30/MT away from your bin and the buyer calls and tells you that it doesn’t grade #2 as indicated or it is a #3 and the discount is x. Better to sell the #3 to the buyer who wants it and won’t discount you. We are seeing historically strong new crop prices already. Some bids are with AoG which makes them much more attractive. If you are interested in doing some new crop checking don’t hesitate to give us a call as we are always interested in buyer’s mindset on new crops. We have good demand for feed barley and wheat with the strongest prices in eastern prairies. The US corn that was supposed to show up at the end of October is having trouble finding transportation. Not enough drivers with trucks sitting. This is keeping demand and prices for other feed grains strong. Also looking for yellow peas and milling oats. If we can help in any way with price discovery don’t hesitate to call any one of the marketers on the bottom of this newsletter. Until next month safe farming. Richard Chambers Marketer - Brandon, MB 204-729-1354 - Office 204-761-8320 - Cell richard@qualitygrain.ca I thought August was an interesting month in the grain markets. Not even in
the running compared to September. It seems the best marketing plan is to just not sell. That will work until it doesn't. Prices are so high compared to historical norms that there is a very good chance of a correction. We have seen drops of $20/MT but it has always came back. The scary thing about a real correction is it will likely take months to recover if not years. Oats are a great example of this. We traded $6.00 oats in August (great price historically) then we traded $6.50, then $7.00. Now we hear stories of advisors saying they will go to $10. That would be great but stop and think what will happen to demand. An 80% increase in the #1 component in Cheerios is going to have an impact on all oat based products. Mom might say junior still needs his Cheerios, but other users will just say too expensive. Price will ration demand. Guaranteed. We have seen new crop corn trend down as harvest is getting rolling in MB. Yields and quality are better than growers expected in July. Prices have dropped from a high of $10 picked up to current levels of $8.50 to $8.60 picked up. This trend could continue as the US corn harvest is just getting under way. This will put some pressure on other commodities. We have good demand for all feed grains. Prices holding steady to strong. We had a bump this past week. Feed wheat at $10 picked up Western MB, feed barley at $8.00-$8.25 in SE SK depending on timeframe. Feed oats are almost at milling prices $5.80- to $6.00. Alberta and western SK are all relative in terms of freight cost. We are seeing a bit of a jump in yellow pea prices as well. $16.50 for near by up to $18 for further out. They need to be 13.5 moisture to get best prices as the US is where the demand is. Other pulses are staying strong. It does look like the mustards are going to be an interesting market. Brown and oriental are grown in some of the most drought affected areas, and this is being reflected in pricing for all mustards including yellow. Let us know if you have any for sale. Best thing to do is call one of us for current local prices. I would just like to mention that Victor Dorma of Airdrie AB is retiring from Quality Grain Marketing. He has been with us for almost 8 years and has provided great service to our clientele in his area. He will be missed as part of our team. If you worked with Victor in the past either Reed McDonald or Andrew Hall will be contacting you in the near future to discuss how Quality Grain can help you with your marketing. We are please to announce we are offering a new marketing tool to help your business succeed, a daily email tracking of all our daily price info to help you make better real time marketing decisions. This daily summary will show all our grain shown for the day and the bids on each lot. This tool has proven to be a very valuable to anyone making grain marketing decisions. Subscription cost - $125 + GST for 1-year subscription. For more information, please follow the link: https://www.qualitygrain.ca/store/p2/Quality_Grain_Bid_Sheet.html We have good demand for: - Feed Wheat - Barley both feed and malt - 2 CW oats - Yellow peas - Heated & Green canola I imagine most of the crop is now in the bin. Now the interesting part is coming. When to pull the trigger, is the buyer credit worthy, how high can price go. Give us a call and we can talk these things over with you. Richard Chambers Marketer - Brandon, MB 204-729-1354 - Office 204-761-8320 - Cell richard@qualitygrain.ca 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 |