At more than C$7/bu, Western Canadian rye prices have probably topped out.
“When they start getting into these levels all buyers are going to be hand-to-mouth,” said Cal Vandaele of Vandaele Seed in Medora, Man. “Nobody is going to want to be owning too much inventory at these levels.”
Vandaele said prices last December/January were approximately $4/bu and by the spring they reached the mid-$5 range, continuing upward. That strength reflected dry seeding conditions in the spring, and a smaller planted area, as producers turned off by the low prices turned instead to other crops.
Since then there’s been a third factor that’s come into play, according to Vandaele.
“The saving grace (of) this year’s crop is its good quality. Prices have reacted quite aggressively.”
But as winter progresses, Vandaele said that he expects prices will start to head south again.
“I think the market is probably starting to peak out. If you look at a lot of companies’ new-crop bids, they’re nowhere near those numbers you’re seeing. New-crop bids are in the $5.50 to $6 range.”
According to Statistics Canada’s September crop production report, domestic rye production fell by more than 39% to 207,000 tonnes in 2018, making it the country’s smallest crop since 133,800 tonnes in 2002.
Source: DePutter Publishing Ltd.
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