Weekly Animal Feed Outlook: Prairie grain deals see surprising harvest strength

MarketsClose — Feed grain supplies in Western Canada have shown some strength in recent weeks, despite the advanced harvest.

“We saw a recovery during the harvest, which is a strange thing,” said grain trader Jay Janzen of CorNine Commodities in Lacombe, Alta. said. He linked the off-season strength to solid demand and a significant lack of sales by farmers.

“We’ve seen barley go up 50 to 60 cents (a bushel) in the last two weeks,” he said.

“A lot of these feedlots are seeing the price relative to corn and covering their needs over the next few months,” he said, adding that feedlots don’t want to be caught off guard and see a repeat of 2021 when domestic grain supplies were tight, and they were forced to import more corn from the United States.

On the other side, farmers lock bins until they see higher prices, unless they need to move for bin space.

Statistics Canada recently pegged Canadian barley production for 2022 at 9.43 million tonnes, which would be well above the 6.96 million tonnes grown the previous year.

With the increase in production, there may not be much room for higher prices, although Janzen expects offers could still climb.

“There is probably some sort of war going on between feeders and farmers right now,” he added.

—Phil Franz-Warkentin reports for MarketsFarm of Winnipeg.