July 11, 2011


Feed wheat prices in Canada fall on lack of demand



The price of feed wheat in Canada has declined, as many cattle feedlots across the Prairies have reduced the number of cattle on their yards now that summer has arrived.


Gerald Snip, a grain trader with Marketplace Commodities at Lethbridge, Alberta, Canada, said the lower feed wheat price due to fewer animals at the feedlots was not surprising.


"Feedlots don't have the manpower to have people feeding the livestock and putting up silage, so demand is a bit lower," he said. "It's really no surprise that there are fewer animals. This is fairly common to see in the summer."


Both wheat and corn futures on the Chicago Board of Trade (CBOT) saw sharp declines last week following the US Department of Agriculture's (USDA) acreage report. When asked if spillover weakness can be found from those futures markets, Snip said corn had more of an impact on the feed wheat market.


"You are more likely to see a bit of a tie-in with corn prices, as corn is used for livestock feed more than wheat is on the CBOT," he said. "The price of wheat (on the CBOT) is based on supply and demand from humans, as opposed from animals."


Snip did not expect to see prices change significantly for the remainder of the calendar year.


"At the moment, for September delivery in Lethbridge, we are looking at about CAD2 (US$2.07) per ton less than right now," he said. "For October, November, and December deliveries feed wheat is about the same price as it is right now."


Current elevator deliveries for feed wheat are bringing as much as CAD6 (US$6.22) per bushel in Manitoba, CAD5.78 (US$5.99) per bushel in Saskatchewan, and CAD5.77 (US$5.98) per bushel in Alberta, according to Prairie Ag Hotwire, which are between CAD0.02-0.80 (US$0.02-0.82) lower than the previous month.

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