(Resource News International) –– Feed wheat cash bids in Western Canada have been consolidating at current levels, although the trend has been to the upside.
“Much of the upward movement that has been seen in feed wheat is being linked to the change in the weather and to some extent a small pick up in demand,” said Jerry Klassen, an independent analyst and futures trader, noting there were a lot of logistics involved.
Klassen said the return of cold weather, and the reluctance of producers to deliver during such periods, have helped to strengthen bids in areas where demand has also improved somewhat.
Read Also
Alberta harvest just ahead of average pace
The harvesting of all crops in Alberta reached 42 per cent complete as of Sept. 9, compared to the five-year average of 40 per cent. The provincial agriculture department noted combing was highlighted by little or no rain.
The pickup in demand was linked in part to the need to increase rations for livestock due to the Arctic-like temperatures which have settled across the Canadian Prairies, he said.
Another factor that has helped to buoy the cash bids for feed wheat has been the push higher in the bids from the ethanol sector, particularly in Manitoba and along the Saskatchewan border, Klassen said.
A general firming in CBOT corn futures has also helped to firm up feed wheat values, he said.
“I wouldn’t call the upward movement in feed wheat a bull run, but rather more of a correction,” Klassen said.
He also cautioned that values were unlikely to stay high too long, as producers at some point will decide to take the higher price and “run to the bank with it.”
Cash bids for feed wheat delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data, currently range from $3.48 to $3.77 a bushel, in Manitoba around $4.16 to $4.33 and in Alberta from $3.57 to $4.68.
At the end of November, cash bids for feed wheat in Saskatchewan were $3.25 to $3.90 a bushel, in Manitoba from $3.83 to $4.18 and in Alberta from $3.46 to $4.71 a bushel.
