Mid-Month Newsletter

Good Day,

It seems that every day we end up discussing this issue with a producer. Why is corn (or wheat, or barley) prices as they are? Why do bushel values vary so much? 

The best way to answer this is to kick bushels to the curb. A pig or a cow doesn’t need bushels to grow and get fat on. They just need X number of lbs or KG’s/days to achieve a desired rate of gain. The easiest way to figure this out is to use the $/MT value when thinking of what you have to sell. A MT of corn is going to produce 10 to 12% more gain than a MT of barley just because of the higher percentage of starch. A MT of wheat will have a very similar gain as a MT corn but the higher protein can lead to a cheaper ration. Unfortunately, with all the feed wheat we have around this year there is a limit to how much wheat you can feed before there are issues with digestion.

Barley
4.00 $/bus
183.72 $/MT

Corn
4.90 $/bus
192.90 $/MT

Oats
3.00 $/bus
194.53 $/MT

Wheat
5.30 $/bus
194.74 $/MT

At Quality Grain our Broker Notes and Daily Summary prices are in $/MT. We don’t do this to be difficult, we do this to illustrate the exact price you will be paid based on the unload weight of the truck. As you can see in the chart above the bushel values ($/bus) vary significantly between the four commodities, but once we break it down per ton the prices have a strong correlation. Bushels are a unique measure of volume but to make bushels work there is a significant assumption baked in that isn’t always uniform. A British Bushel (avery) of barley is based on the assumption of the predicted approximate bushel weight (48 lbs for barley, 56 lbs for corn, 34 lbs for oats, and 60 lbs for wheat).

Right now, here in MB we are trading barley at $185 to $190 ($4.00- $4.10/bushel) FOB farm. Feed wheat at $195 to $200/MT ($5.30- &5.50) and corn is trading at $190-$200/MT ($4.80- $5.10) because of harvest pressure. And harvest pressure will likely continue until the end of October. With huge yields in the corn crop this year. 165 to 200 bushels/Acre we are going to have a depressed feed market for the foreseeable future. As you can see talking about feed grains in $/MT makes it much easier to see actual feed value vs the $/bushel prices.

Until next month,


Richard Chambers
Marketer - Brandon, MB
204-729-1354 - Office
204-761-8320 - Cell
[email protected]