US Corn Expected to Drive Feed Ingedient Costs

CANADA - A Winnipeg-based grain market analyst expects US corn to play a key role in influencing the cost of feeding livestock heading into the fall and winter this year, writes Bruce Cochrane.
calendar icon 16 July 2010
clock icon 3 minute read

Due to the unusually wet spring in the range of 10 million acres of cropland across the prairies have been left unseeded this year which will result in reduced availability of Canadian feed grains.

Chuck Penner, the president of LeftField Commodity Research, says the continued rain and high humidifies are starting to raise concerns among livestock producers related to fusarium while delayed crop development raises the risk of damage from an early frost.

Chuck Penner – LeftField Commodity Research:

I think what they should be doing is they should really be watching what's going on south of the border.

As long as that corn crop in the US is looking in decent shape those large large supplies of corn that are expected to come through from the states will either translate into corn imports into Canada or distillers grain imports into Canada and so will help relieve that situation to some degree.

That's a key one to watch.

They should also be watching, in terms of the corn market, what's going on with Chinese imports of corn because that could take a significant chunk of the US corn crop out of the market as well and that could be a significant factor that could lead to higher prices down the road.

In terms of some of their strategies that they can do is, we thin, that they should be looking at booking some feed grains for the fall months and into the winter months if possible and trying to maintain some supplies, probably into the November-December time period.

Mr Penner notes that because the US corn crop looks to be in good shape, the situation on the Canadian side of the border has had a limited impact on prices so far.

He says cereal grain prices have increased by five and in some cases up to ten dollars a ton, which is a pretty small response to the whole issue of unseeded acres.

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