Feed weekly outlook: Bids high, but limited supplies mean little moving

MarketsFarm — Feed grain prices in Western Canada remain at very high levels heading into the New Year, but little is actually trading as feedlots fill up with cheaper corn from the U.S.

“The volume trading of Canadian feed grains has dropped significantly,” said Jim Beusekom, of Market Place Commodities at Lethbridge, noting about 80 per cent of cattle rations in the area were being replaced by U.S. corn.

“Prices are still holding on, but the volumes trading are a small amount,” he said, adding “there’s not that much left anyways.”

Feed barley in the key Lethbridge cattle feeding area was trading at $440-$445 per tonne in mid-December, with feed wheat at $460-$465, Beusekom said. That compares with corn coming up from the U.S. at $400 per tonne.

“Right now the feeders are encouraged on price to use corn,” he said.

Some cattle feeders liked to keep some barley in their rations, he said, accounting for the limited amount still trading. Meanwhile, most of the feed wheat being marketed was likely going into poultry and hog rations.

With Canadian feed grain supplies very tight, Beusekom expected the market would continue to trade in a similar fashion until the new crop is available in August.

“We do not have enough supply on the Prairies to go back to feeding barley — it’s not just price, it’s just not there.”

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.