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Wittal: Livestock feeders biding their time

Aug. 17 –– Financial markets were in a net loss position from the start of trade and stayed there for the day. European and Asian markets were down in overnight trade, as was crude oil, so U.S. markets followed the line of least resistance: Down.

The U.S. dollar is up four-10ths of a cent today. The Canadian dollar is down 0.31 cents to close at US90.47 cents.

The Dow Jones September quote closed down 200 points at 9,118.

Crude oil is down 76 cents per barrel today to close at US$66.75.

Corn finished down five to six cents per bushel today; beans ended down 18-37 cents.

Wheat was down six to 10.5 cents per bushel on the various U.S. exchanges. Minneapolis September wheat futures closed down 8.4 cents per bushel today.

Canola finished down $9-$10.50 per tonne today. Barley closed down $2.50 today at $135 per tonne.

There are real concerns throughout Manitoba as to the lateness of the corn crop. It is said to be two to three weeks behind in maturity and will need to be frost-free until mid-October or later in order to get an average crop this year.

There was frost reported at a number of weather sites north of Edmonton on the weekend, with reading of -2 to -4°C. Calls for frost in parts of Manitoba and northern Saskatchewan for the end of this week wouldn’t be good for corn producers at this stage of crop development.

What’s baffling for some right now is this: why aren’t the markets reflecting this in the futures values?

The main reason would be the overshadowing of the recently-predicted above-average U.S. corn crop that is expected to be harvested this fall.

Secondly is the fact that the Canadian livestock feeding industry is not interested in buying feed grains right now. It anticipates a buffet of feed grains this fall as crops across Western Canada are late and frost is a reality that gives the feeders confidence they will be able to buy what they want, when they want, at values cheaper than today’s.

Add to that a strong dollar, and Canadian feeders can purchase U.S. corn and feedstuffs very competitively, which means they will buy the cheapest source possible to help their bottom line, so don’t expect great things for feed grain prices this next year if we get an early frost.

That’s all for today. –Brian

— Brian Wittal has spent over 27 years in the grain industry, including as an elevator manager and producer services representative for Alberta Wheat Pool, a regional sales manager for AgPro Grain and farm business representative for the Canadian Wheat Board, where he helped design some of the new pricing programs. He also operates his own company providing marketing and risk management advice for Prairie grain producers. Brian’s daily commentaries focus on how domestic and world market conditions affect you directly as grain producers.

Brian welcomes feedback and information on market conditions in your area, such as current offering prices, basis levels, trucking premiums and special crops contracts. Contact Brian today.

About the author



Brian Wittal

Brian Wittal has 30 years of grain industry experience and currently offers market planning and marketing advice to farmers through his company Pro Com Marketing Ltd.



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