Canada Markets

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 pdqinfo.ca 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.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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