A shortage of low-fusarium feed wheat and the decreased value of the Canadian dollar are supporting the cash price for corn on the eastern side of the prairies.
Old crop Chicago futures have been trading in the US$3.65 to US$3.95 range since early January, while cash bids in southern Manitoba have risen to between C$4.50 and C$5 bushel.
“The corn market doesn’t trade in isolation. Feed ingredients are all substitutable to some degree,” notes Brenda Tjaden Lepp of FarmLink Marketing Solutions in the interview below. She points out when it comes to cash prices for corn on the prairies, the price relationship between feed barley, feed wheat and corn can trump what’s happening on U.S. futures. “Not to say the futures market has no impact, but for the last few months it’s been caught in a sideways range, whereas the cash market is up a buck.”
While corn values in southern Manitoba have been pushed higher by feed mills and other users looking for an alternative to trucking in low vomi wheat from Saskatchewan, feedgrain values are now getting to the point where buyers can afford to import U.S. corn by train, notes Tjaden Lepp.
“That threshold where you can unleash a brand new supply of significant volume, that tends to be where you cap short-term price upside in a market like feedgrains,” she says.
Tjaden Lepp shares her perspective on the market for corn and other feedgrains on the eastern prairies, and whether these prices will lead to renewed interest in the expansion of corn acres: