(Commodity News Service Canada) — Rye bids in Western Canada have climbed sharply higher over the past couple of weeks, bringing some renewed attention to the thinly traded crop.
Prices as high as $5.50 per bushel are being reported in Manitoba and Saskatchewan, which compares with bids in the $4 area only two weeks ago, according to Prairie Ag Hotwire data.
“It’s one of these markets that flies under the radar for years and then all of a sudden we’re a little on the tight side, which is where we are now,” one grain broker said. He said it would be abnormal for rye not to have strengthened, given the advances in other grains such as barley and corn.
While rye may have lagged those other markets to the upside, “it has positive fundamentals and it’s moving,” the broker added.
“All of the coarse grains complex seems to be feeding off each other,” said John Pauch, a coarse-grains analyst with Agriculture and Agri-Food Canada’s market analysis division in Winnipeg, on the recent strength in the rye market.
Coarse grains across the northern hemisphere had production problems this year, and rye was caught up in that, said Pauch, adding that declining rye production in Canada was another supportive factor, as supplies seem to move lower every year.
Rye prices should hold at current levels, or even increase next year, due to the continued tighter supply situation, he said.
Canada’s 2010-11 rye crop was pegged at 216,400 tonnes by Statistics Canada, which compares with 280,500 the previous year.
Looking ahead to 2011, Canadian farmers planted 300,000 acres of rye this past fall for harvest next year, which compares with 320,000 acres the previous year, according to StatsCan estimates. Pauch said adverse conditions at harvest time, particularly in Saskatchewan, limited the acres that went into the crop.
While rye prices are looking firmer right now, any strength may not necessarily work out to increased Canadian production in future years. Pauch noted that when penciling out the cost of production, rye is at the bottom 20 per cent of cropping choices.