Weekly Feed Outlook: Many Lethbridge Feedlots Switching to U.S. Corn
Insights by Joseph Billett, President
With barley prices on the rise, some Lethbridge feedlots are making a savvy switch to U.S. corn. At $4-$5 less per tonne than barley, corn is looking like the smarter, more affordable choice for cattle feeders. Barley sales are slowing as producers prefer to export rather than sell for feed, with exports down sharply from last year.
U.S. corn is benefiting from hefty stockpiles, making it a bargain at $247 per tonne compared to barley’s $248. With Western Canada facing a forage shortage but decent crop yields, it’s a good time for producers to consider selling barley before prices potentially drop further. Wheat remains too pricey for feed, pushing producers to find better deals elsewhere.
Market Snapshot: Canola, Wheat, and Oil Trends
Canola: ICE canola futures took a nosedive, dropping $12-$13/tonne and ending the day down $13.60 at $570.00/tonne. The November contract slipped below its 20-day average, but canola’s price remains relatively attractive compared to other oilseeds. We’re hoping for a rebound soon.
US Markets: U.S. wheat futures saw a modest increase, while corn and soybeans struggled. December spring wheat rose 3.25 cents to $6.10/bu, but there’s no strong signal for a major price jump. Crude oil prices are weak due to reduced Chinese demand and oversupply, which isn’t great news for bio-fuel crops.
Crop conditions in the U.S. are stable, though Brazil’s drought could impact future corn and soybean yields. Traders are in a holding pattern as they await the USDA’s supply/demand report on Thursday. This report will update crop production estimates and could influence market trends.
USDA Report Preview:
- Corn Production: Expected at 15.076 billion bu, with yields around 182.4 bu/acre.
- Soybean Production: Expected at 4.589 billion bu, with yields at 53.2 bu/acre.
- Ending Stocks: Slight reductions expected for 2023-24 corn and soybeans, with declines for 2024-25 corn and wheat.
Global Carryover:
- Corn: 309.39 MMT for 2024-25.
- Soybeans: 133.86 MMT for 2024-25.
- Wheat: 255.31 MMT for 2024-25.
The market is in a “wait-and-see” mode as traders anticipate USDA updates and monitor the early U.S. harvest. Expect some fluctuation until clearer trends emerge.
Because Farming Is Forever,
Joseph
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