Posted on 06/29/2010, 7:40 am, by mySteinbach

A Winnipeg based grain market analyst is advising livestock producers to lock in a portion of their winter feed grain supplies to protect against anticipated price fluctuations.

Abnormally wet spring weather conditions across the prairies are expected to result in the range of 10 million acres of cropland, split among wheat, oats and barley as well as canola, flax and other crops, being left unseeded this year.

Chuck Penner, the president of LeftField Commodity Research, says that will result in a fairly significant drop in the availability of Canadian feed grains and we’ve already seen prices responding a little bit.

The price reaction so far has been fairly muted.

It hasn’t been extremely strong and to a large degree that’s because of what’s happening south of the border where you have a corn crop that is looking in quite good shape.

What we’ve seen over the past couple of years is that feeders in western Canada especially, eastern Canada as well but in western Canada, have been very pleased with the availability of corn and DDGS from the states and so they don’t necessarily feel panicked if there is going to be a shortfall in Canadian supplies.

So far prices have been up maybe five and in some cases up to ten dollars a ton and compared to what’s happening in the canola markets and flax markets that’s a pretty small response to the whole issue of unseeded acres.

Penner says the anticipated large supplies of U.S. corn will likely result in increased corn or corn distillers dried grain with solubles imports into Canada easing the price situation to some degree but exports of U.S. corn to China could take a significant amount of corn out of the market.

He says the situation is still very fluid with a lot of unknowns both in terms of acreages and potential yield so there will be a lot of volatility.

He recommends booking some feed grains for the fall and winter months if possible.

Source: Farmscape.Ca