MarketsFarm — Well covered with grain for now, feedlots are beginning to set their sights on the new crop.
Drought conditions on the Prairies and the U.S. northern Plains are causing new-crop feed wheat and feed barley prices to go up, according to a Saskatchewan-based trader.
“Demand for old crop (is) dwindling and the focus on new crop is causing old-crop prices to come down,” Evan Peterson, trader for JGL Commodities at Moose Jaw, Sask., wrote in an email.
“New crop has been increasing in price due to dry conditions in southwest Saskatchewan, southern Alberta, North Dakota and Montana.”
While not providing an estimate for barley acres ahead of Statistics Canada’s acreage report to be released on Tuesday next week, Peterson believes barley production will decrease due to the ongoing heat.
He also believes buyers looking for a price advantage between barley and wheat will be disappointed.
“Wheat futures have been gaining strength due to weather, as well. So buying wheat as a substitute for barley will not be an option yet,” Peterson wrote.
Dry weather “will keep the new crop prices strong for the time being… (We) will see new-crop values stay strong unless we start seeing some rain real soon.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.