(Resource News International) — Feed wheat cash bids in Western Canada have been holding at some pretty stagnant levels over the past couple of weeks, with most market participants anticipating that values will continue to slowly erode.
“Cash prices for feed wheat in Alberta have been holding around the $160 per tonne level over the past month,” said Jerry Klassen, a Winnipeg wheat trader and market analyst.
There has not been a lot of action in the feed market, he said, and “despite seeing some evidence of increased feed wheat in rations for livestock this year, demand remains soft.”
The domestic feed market, he noted, is still at a discount to the Canadian Wheat Board’s export program for feed wheat.
“The only wheat going into the domestic feed market is of very poor quality, I would say No. 4 or lower,” Klassen said.
Supplies of feed wheat are not necessarily all that great because the Prairies had a pretty high quality harvest in 2008-09, but the bulk of the lower quality wheat is in Alberta, he said.
The price of feed wheat may be a bit better in Manitoba, he said, because of the hog sector there and the tighter supply situation.
Klassen also pointed out that there are very few end-users wanting to book new-crop feed wheat supplies at this time.
“There is the expectation that with the extremely late start to seeding and the potential for frost at harvest, there will be no shortage of feed-quality wheat in the fall,” Klassen said.
“No one is worried that there is going to be a lack of feed wheat to work with given the cool weather forecast over the next 10 to 20 days.”
Cash bids for feed wheat delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data, currently range from $4.23 to $4.68 a bushel, in Manitoba around $3.40 to $4.35 and in Alberta from $4.29 to $5.17 a bushel. New-crop bids that are available in Saskatchewan range from $4.35 to $4.76 a bushel.
At the end of April, cash bids for feed wheat in Saskatchewan were $4.22 to $4.44 a bushel, in Manitoba $3.40 to $4.35 and in Alberta from $4.36 to $5.03. New-crop bids for feed wheat in Saskatchewan at the end of April were $4 to $4.35 a bushel.