Husky Energy’s ethanol plant in western Manitoba is holding off on new-crop feedstock contracts due to uncertainty in the market, according to a Husky source.
As of June 5, the 130 million-litre per year plant at Minnedosa, about 50 km north of Brandon, was offering producers $4.60 a bushel for July delivery of wheat and corn. The plant is currently using both feed stocks to produce its ethanol.
“We’re going month-by-month for deliveries right now just because of the uncertainty of the market. We haven’t done anything yet for new-crop contracts out here,” the company source said.
The plant tries to keep abreast of the futures markets but weather can always throw a wrench into those plans, he said.
Cold weather across the Prairie provinces and dry areas in western Saskatchewan have some people thinking about the possibility of lower crop production this year.
On the other hand, poor weather could also mean higher supplies of feed-quality wheat, he said.
Farmer interest at the current price has been slow, mainly because growers have been out in their fields seeding, but it has been picking up again, the source said.
In general, the Minnedosa ethanol plant has seen fewer winter wheat and Canadian prairie spring wheat deliveries that it thought it would, but a lot of Manitoba corn growers have gotten on board, which the company is happy to see, the source said.
“It gives us an extra option. We know the Canadian Wheat Board is actively selling the winter wheats into the milling market, so farmers have that option and they can secure strong prices if their wheat is good quality. It can go in both directions and that is great,” the source said. “If the farmer has more options, it is better all the way around.”
As of June 5, other bids in Manitoba for feed wheat (delivered to elevator) ranged from $4.04 to $4.24 a bushel, according to prices collected by Prairie Ag Hotwire.