MarketsFarm — Logistics issues moving grain where it needs to be in Western Canada continue to prop up feed prices, but the market is starting to level off, according to a broker.
“We are seeing a bit of a shortage of trucks,” said Tracy Green of Market Master Ltd. in Edmonton, adding “things are still moving, just a lot of our truckers are booked right up.”
The end of the strike at Canadian National Railway (CN) will help the overall transportation situation, she added.
The logistics tightness did see feed prices rise over the past few weeks, with feed barley trading at about $235 per tonne delivered into the key Lethbridge feeding area.
Buyers were also short on contracts, due to the large amounts of tough grain coming off the field that needed to be dried.
Green said prices were leveling off now, as the higher prices have feedlots reverting to buying on a hand-to-mouth basis.
Demand typically increases over the winter months, as cattle eat more when the temperatures drop. However, farmer selling also picks up around the New Year as producers sell into the new tax year. Green expected those two conflicting forces would keep some stability in the market.
Beyond the supply/demand fundamentals, quality of the grain could become a larger concern going forward. Green said more ergot was showing up in feed wheat samples this year than normal, which will lead to downgrades and possible rejections if the levels are too high.
— Phil Franz-Warkentin reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.