Feed weekly outlook: Corn seeing higher prices, transportation delays

MarketsFarm — Corn has become the primary feed grain in Alberta feedlots due to its lower price compared to barley and wheat. However, rising corn prices in the U.S. and transportation issues are causing some buyers to give pause.

“Basic levels are a little bit stronger. (Add in) the exchange rate, there are a little bit more factors that directly affect the cash price of corn in Lethbridge and maybe our traditional feed grains like barley and wheat,” said Jim Beusekom, president of Market Place Commodities in Lethbridge.

March corn on the Chicago Mercantile Exchange (CME) traded as high as US$6.6275 per bushel (C$330.84 per tonne) on Thursday. Beusekom said corn is being purchased for as much as $425 per tonne in Lethbridge. Despite the rising prices, corn is still the crop of choice for feedlots.

“An unprecedented amount of corn is being used. It’s not just what we refer to as Feedlot Alley, it’s throughout Alberta and Saskatchewan,” Beusekom said.

Canada is estimated to import 3.8 million tonnes of corn during the 2021-22 marketing year, according to the U.S. Department of Agriculture’s monthly supply/demand estimates report released Wednesday. The February estimate increased by 500,000 tonnes compared to January’s.

Supply chain disruptions, such as COVID-19, the border blockade near Coutts, Alta., and rail delays due to cold weather, have affected the delivery of corn shipments.

Beusekom said some feedlots have come close to running out of grain, but he hasn’t heard of any running out.

“It doesn’t mean it doesn’t happen. We’re just not aware (of any running out),” he said. “Corn should be pretty stable (over the next few weeks). We’re moving out of winter. Things are moving along and it should be OK.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.