Canada Markets

Prairie Feed Wheat Sets Floor Price

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The blue line represents the trend in feed wheat prices delivered Lethbridge, based on the upper end of the weekly range reported by Alberta Agriculture. The brown line shows the trend in weekly Saskatchewan feed wheat prices reported by the provincial government. (DTN graphic by Cliff Jamieson)

As seen on the attached chart, the blue line represents the upper-end of the range of weekly feed wheat prices delivered Lethbridge as reported by Alberta Agriculture, increasing by 38% from the crop year low reached in August to the recent high reported at $310/metric ton reported for the week of Jan. 25. During the past three years, this price has averaged $239/mt for this week.

The brown line represents the weekly Saskatchewan Agriculture reporting of average feed wheat prices in the province. This data shows a 77% increase from the August low to the recent high of $268.23/mt ($7.30/bushel), although there is a suspicious sharp drop in price shown for Aug. 19 and recovery the week after. The most recent price of $259.04 ($7.05/bu) as of Feb. 3 compares to the three-year average for this week of $189.08/mt. It also compares to the Feb. 4 average of the four Saskatchewan points reported by for No. 1 CWRS 13.5% of $269.22/mt ($7.33/bu).

We will be watching for a signs of this feed demand for wheat that should appear in the Feb. 5 Statistics Canada Dec. 31 stocks report. Agriculture and Agri-Food Canada's supply and demand forecasts show the feed use of barley at 6.715 million metric tons as of January's estimates, down only slightly from the previous year, despite a forecast 15% increase in exports that is tightening supplies with the possibility this movement will continue.

At the same time, AAFC started the crop year with a 4.280 mmt forecast for feed use of wheat in August and have whittled this down to 2.987 mmt in the January forecast, down 700,000 mt or 19% from the 2019-20 crop year, likely largely tied to the high quality wheat crop.

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