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Difficult harvest increases feed wheat supplies

Adverse harvest conditions across the Canadian prairies is pointing to large volumes of  feed wheat around this winter. 

Gerald Snip, a grain trader with Market Place Commodities in Lethbridge, said most of Alberta and Saskatchewan are having big problems getting the crop off. 

"It’s just too wet to even get the combines on the field right now," Snip said. "There’s lots of frustration out there at the moment." 

All of the rain and cool temperatures have pushed back not only the harvest, but the maturity of the crop. Because of these factors, Snip said the quality of wheat will be poor, meaning a large supply of feed wheat coming in. 

"As time keeps on going, the quality deteriorates, and producers get the grain sprouting in the swath, and sometimes even in the standing grain with the excess moisture," he said. 

Snip said frost is a non-issue as far as quality is concerned. Although it looks as if there will be plenty of feed wheat coming in once the harvest is over, Snip said the market is still moving in a bullish direction. 

"It seems to be moving up a bit, mainly because of lack of access to product. Guys are holding onto stuff, thinking the market is going up if they happen to have grain," Snip said. 

Snip said demand is strong, with more feedlots incorporating wheat into their rations (along with barley). "There’s constant demand. Just like you have to feed your family every day, you have to feed your livestock every day," he said. 

Snip said he expects the market to remain about where it is for the final quarter of 2010. "There is export demand, but right now guys can’t get it off (the field). Once it does come off, there’s going to be a good amount of grain for sale." 

Elevator deliveries were bringing as much as $4.62 per bushel in Manitoba, $4.23 per bushel in Saskatchewan, and $5.50 per bushel in Alberta, according to Prairie Ag Hotwire. Those prices range from steady to $0.66 per bushel higher from one month ago.

The Canadian Wheat Board says harvest is only 25 per cent completed across the Prairies. Harvest is typically 60 per cent completed this time of year. 

A CWB official is quoted in a Reuters report saying the volume of high-quality wheat and barley produced this year will be the smallest in six years. 

Conditions are similar to those in 2004, when frost and rain reduced quality, said Stuart McMillan, crop and weather analyst for the Wheat Board.

"We’ve seen a pretty dramatic drop in expectations for No. 1 and 2 (quality grades)," he said.

But he said ample carryover supplies will enable the board to supply customers looking for top quality. 

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