A weather and crop analyst with the Canadian Wheat Board warns declining U.S. corn yield forecasts can be expected to continue to put upward pressure on North American feedgrain prices.
Despite this year's difficult growing season cereal crops in western Canada have been coming off the fields in excellent condition.
Canadian Wheat Board weather and crop analyst Stuart McMillan says wheat production is expected to come in close to the five year average but oat and barley production will be well below and the state of the U.S. corn crop continues to influence prices.
Clip-Stuart McMillan-Canadian Wheat Board:
Someone had said to me that one point just about a week and a half ago that Lethbridge was the cheapest feedgrains in all of North America at that moment in time which is a very unusual situation and one that is liable to correct itself I'm sure, the main issue being the declining U.S. corn yield and production numbers.
With each month USDA has been dropping the forecast lower and there is really little chance the U.S. corn crop will be over 150 bushels per acre.
The real question comes as just how much below 150 bushels an acre it will be again this year.
That has tremendously reduced the availability of corn for feeding, has had some impact on DDGS but that I think will be less pronounced and certainly has raised the prices and the values of all cereals across the board here in North America both in Canada and the U.S. side.
McMillan acknowledges there's mixed thought among the analysts right now with some saying the declines have been over stated for the northern plains and we might see a little bit of a bounce on the U.S. yield forecasts for those areas but others are saying absolutely not, it's been very poor weather and there's no reason to assume yields will magically reappear.
He says there's a variety of opinions out there right now and whether corn yield forecasts will continue to drop is any producers guess.