Wheat also slipped on the news of Trump’s criticism, and corn traded near flat, as it received support from strong demand, according to analysts.

The July soybean contract on the Chicago Board of Trade was down 6-1/4 cents at $10.41-1/2 a bushel, having earlier reached its highest point since late February.

July corn lost a 1/4 cent at $4.90 a bushel and July wheat was down 10 cents at $5.52-1/4 a bushel.

Chicago grains and soybeans were getting caught up in a widespread sell-off, said Mark Soderberg, senior agricultural market analyst at ADM Investor Services, after Trump called Powell a “major loser” in a social media post on Monday and said the U.S. economy could slow down if interest rates are not lowered immediately.

Powell says rates should not be lowered until there is more data on the inflationary impact of Trump’s tariff policies.

“I think the market’s growing increasingly uncomfortable with the tone the Trump administration is taking with the Federal Reserve,” Soderberg said.

The comments sent stock markets lower as traders feared a fight over the Fed’s monetary policy independence and the possibility that Trump might try to remove Powell before his term is over.

Meanwhile, wet weather forecast in parts of the U.S. Midwest is likely to slow planting of corn, Soderberg said, although there should be good progress on spring wheat in the Northern Plains, he said.

Corn also got support from strong demand, Soderberg said.

“We’re competitively priced in the global marketplace,” he said, adding, “You’re going to see higher exports and lower stocks down the road.”

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Winnipeg-based P+H said Tuesday the work already underway at its inland facility on Highway 21 just south of Kincardine will boost unloading speeds on grain deliveries and “expand storage capacity for farmers and customers in the region.”

P+H said the enhanced site “will be dedicated to serving the robust demand for high-quality wheat” from the company’s four southern Ontario flour mills.

The site upgrades, which are expected to be completed early next year, will be done in two phases, a company representative said Thursday via email.

The first phase will include automated systems to increase loading speeds. Those plans call for bigger receiving pits, a new dryer and wet storage system, a self-weighing kiosk for trucks, and a probing station, P+H said.

“Once completed, the new facility will offer faster unload times for producers eliminating lineups and enhancing food safety and quality control capabilities.”

Also, P+H said, self-loading capability for outbound trucks will be added, so as to “reduce wait times and improve overall efficiency.”

In the second phase, P+H said Thursday, the facility’s storage will be expanded to double its current capacity of 10,000 tonnes.

On top of the efficiency boost the upgrades will provide, “they will also benefit our customers by allowing them to unload their grain quickly and easily, reducing wait times and improving their overall experience,” Bruce Humphries, the Kincardine site’s general manager, said Tuesday in the company’s release. — Glacier FarmMedia Network

UPDATE, April 6: Article updated to include comment from P+H.

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But according to one trader, this won’t mean demand will shift from corn to barley anytime soon.

Evan Peterson of JGL Commodities in Saskatoon said one spot price for corn in southern Alberta was $450 per tonne ($11.43 per bushel). On the Chicago Board of Trade (CBOT), the May contract for corn has steadily traded at around US$7.50/bu. since the Russian invasion of Ukraine in late February.

Meanwhile, the high-delivered bid for feed barley in Alberta was $9.80/bu., according to Prairie Ag Hotwire. Peterson added that barley had a bid of $8/bu. picked up from the farm in Alberta. Despite barley’s lower prices compared to corn, the latter is still the grain of choice at feedlots.

“There’s lots of corn in southern Alberta. Trains are moving very smooth now, a lot more efficient than they were. It seems that feedlots are overflowed with corn right now, which has just driven demand for everything way down,” Peterson said.

Even if feedlots had the capacity to add barley, he added, last year’s drought has hampered supply.

“The problem is, there isn’t enough barley out there to really change anything,” he explained. “The supply of barley on the farm gate is so low, that you physically do not go out and buy it on a cheaper value to replace expensive corn.”

Peterson predicts fewer barley acres to be seeded this year in Western Canada due to lower prices and its lack of heat resistance compared to wheat, for which prices have risen due to the unrest in Ukraine.

“Now that we have such high new-crop milling wheat prices, along with oats and canola, farmers are going to grow less barley,” he said.

Peterson anticipates feed grain prices to remain strong but turn flat in the near future. However, he didn’t rule out the possibility that barley prices could change.

“With acres being down, we’re going to be paying more money for barley. Plus we’re going to see export barley probably kick in overseas, which really hasn’t been in full effect yet, but I think it will in the next little while.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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Nearby spring wheat futures, trading at around $8 per bushel, were posting a premium of nearly $2 per bushel over K.C. hard red winter wheat on Wednesday (all figures US$).

That marks the largest premium since 2017 and compares with early 2021 when spring wheat was trading at par or even at a slight discount to K.C. wheat.

Hot and dry weather was the main driver behind the strength in spring wheat, according to Bryan Strommen of Progressive Ag at Fargo, N.D.

With no significant precipitation in the forecast, “for the most part, I don’t even know if rain would help” the wheat crop, he said.

“They kept putting rain in the extended forecast, but it just didn’t happen, with spotty showers here and there and no big widespread soaking rain.”

While the advancing U.S. winter wheat harvest and relatively ample world wheat supplies should keep winter wheat futures under pressure and possibly weigh on spring wheat, Strommen expected spring wheat would maintain its premium, given the likelihood of tighter supplies of higher-protein milling wheat this year.

From a chart standpoint, he saw an upper target around $8.50-$8.60, with a move above that level necessary to encourage another leg higher.

For soybeans and corn at the Chicago Board of Trade (CBOT), all eyes are also on the weather.

“The forecast for the western Corn Belt is dry and hot, but there’s rain in the forecast for the eastern Corn Belt, so it’s a tug-of-war between the two and we’ll see what materializes with the weather,” Strommen said.

Acreage and stocks numbers from the U.S. Department of Agriculture on June 30 could also lead to some price swings if there are any surprises.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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Gordon Harrison, president of the Canadian National Millers Association (CNMA), says grain flour (particularly wheat) is expected to stay a staple food in Canada. As well, he says increases in domestic consumption are possible despite changes in regulatory, environmental, and consumer perception challenges.

Why it matters: Stable flour markets provide good sales opportunities for grain producers, but for demand to grow domestically, public perceptions must change.

There were 48 active wheat mills in Canada in 2010, reported Harrison during a presentation given during C & M Seeds’ virtual wheat industry day. As of this year, CNMA members comprised 24 “industrial scale” milling operations, plus a handful of others for different grains.

Combined, he says, Canadian mills ground 3.2 million tons of wheat in 2019. The amount of flour produced closely follows per-capita flour consumption, which currently stands at 60.2 kilograms per year — marginally larger than consumption during the 1970s.

“By 2000 to 2001, per-capita consumption increased, and subsequently has declined. Consumers are not eating more wheat flour than 50 years ago,” Harrison says.

“Wheat grind and flour production track that consumption trend pretty closely.”

He added that the spike in the early 2000s appeared to be curtailed, in part, by the subsequent widespread popularity of fad diets, such as low-gluten or gluten-free diets.

Overall, it translates to a lack of substantial long-term market growth, though Harrison says this has not stopped the milling industry from modernizing production and making headway in some regions.

Wheat flour is consumed in a vast range of products, and by a highly diverse array of customers. As a consequence, Harrison says major milling wheat classes need to be versatile enough to make hundreds of products from a single class. This is a challenge to manufacturers.

He also says increasingly complex regulatory and customer-driven food safety requirements combined with just in time delivery models, fosters multi-layered production, storage and freight challenges. Safety issues in wheat production, too, will continue to be the dominant issue, although a solvable one.

“There has been considerable progress made in terms of breeding wheat with resistance to fusarium,” says Harrison.

Foodborne illness risk is a more recent factor on the milling industry’s radar. Harrison says the presence of “living human pathogens” will be seen more frequently in wheat and wheat products.

“Because of that consumer, food safety awareness will be more important than in the past.”

Harrison says he is confident wheat-based foods will continue to be staples in Canada for the foreseeable future. North American and Canadian demand will be driven by population growth, with increases of .5 per cent to one per cent growth expected annually.

“We can only hope the consumers who have become reacquainted with baking at home in recent months, that those habits will become ingrained and continue.”

Another .5 per cent growth is possible too, but it relies on consumers viewing wheat flour differently.

“In order for that to happen consumers would need to look at milled grain products as a source of plant protein and dietary fibre, and recognize the importance of fibre in the diet,” says Harrison. “This is a very difficult sell and it’s been a challenge for the last 20 years.”

Overall, though, he believes wheat and the milling industry in Canada has “a pretty bright future.”

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“We’ve been steadily dropping for the past few weeks, and it’s leveled out now,” said Tracey Green, grain broker with Market Master Ltd. in Edmonton.

Buyers were only in the market on a hand-to-mouth basis, she said, while expectations for a large crop in 2019 also weighed on values.

Statistics Canada pegged intended barley plantings in 2019 at 7.155 million acres, which would be up from the 6.493 million seeded the previous year and the largest barley area since 2013.

Barley was priced at around $250-$252 per tonne delivered into Lethbridge.

Snow is in the forecast for the key livestock feeding areas of southern Alberta, which could lead to some nearby price volatility if there are any problems with loading, Green said. However, any moisture would be beneficial for the crops in the long run, as conditions going into the spring are dry.

Feed wheat prices have also softened, but remain better than lower-protein milling wheat in many cases, said Green.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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Milling wheat and durum futures were introduced by ICE Futures Canada in 2012 in response to the end of the Canadian Wheat Board’s single desk powers for marketing those crops, but last saw any activity in 2014.

Barley futures were around in one form or another, dating back to the original Winnipeg Grain Exchange, since 1904, but had not seen any trade since 2016.

On the recommendation of the contract committee, ICE Futures Canada announced the decision to delist the three grain contracts in a notice Wednesday to participants.

“The grains contracts were promoted in an ongoing way, but it’s been almost a year since the barley contract traded,” said Brad Vannan, president of ICE Futures Canada. Of all three grain contracts, he added, barley saw the most traction, “albeit limited.”

The contracts were designed to be similar to ICE’s well used canola futures, but were unable to gather enough liquidity to provide a valuable hedge.

“It’s too bad that those futures didn’t take off… we just couldn’t build the momentum on it,” said Jerry Klassen, manager of Canadian operations with Swiss-based GAP S.A. Grains and Products in Winnipeg.

The lack of the futures market was especially bad for farmers, he said, but added there were other options for price discovery.

Klassen said the advent of mass communication, such as text messaging and online price quotes, meant farmers were able to access pricing options directly from grain buyers on a regular basis.

The relatively small number of those players handling a large percentage of the Western Canadian wheat and durum market was likely a factor in the loss of the futures contracts.

Klassen, who trades durum into Europe, said durum was more of a specialty crop, with most of the business taking place directly between buyers and sellers without the need for a futures market.

For spring wheat, Klassen said, the argument could be made that there was likely only enough production in North America for one futures contract, with the already established Minneapolis Grain Exchange (MGEX) market offering stiff competition for the upstart Canadian contracts.

“There’s a certain critical mass that any futures contract needs to be viable, and it was getting to the point that barley wasn’t representing a large enough market,” said Vannan on the loss of the barley contract.

Durum, Vannan said, “was always a bit of a faint hope.” Milling wheat had the most potential as a futures contract, “but it also had the most competition,” he added, pointing to MGEX spring wheat futures.

ICE, he said, was always on the lookout for new opportunities, but would need to see a critical mass of support from the trade before moving forward with another new offering.

“It’s not a case of ‘build it and they will come,’ it’s a case of there has to be real demand for that type of product,” said Vannan. “The exchange is just a vehicle for the contracts. It’s up to the marketplace to show that they’re willing to support what would be launched.”

As for the remaining canola futures and options, “our canola contract continues to grow,” said Vannan, noting the canola market is performing very well, with good convergence between the futures and cash on delivery months.

“The trade has continued confidence in the canola contract, because it is functioning at all levels,” said Vannan.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow him at @PhilFW on Twitter.

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The Canadian Grain Commission on Friday announced new mildew guidelines, “effective immediately,” for western Canadian milling wheat classes, to allow for an “increased presence” of mildew in visual guides and standards.

The new guidelines won’t have any impact on the quality of products made from Canadian wheat, but will help to “minimize the financial impact” on producers and the grain industry, the commission said.

The commission said the changes stem from its finding in September 2014 that “numerous” samples of Canada Western Red Spring (CWRS) wheat from the annual Harvest Sample program showed “increased amounts” of mildew damage and were being downgraded.

The commission said it recognized the economic impacts on farmers whose wheat was downgraded, and “anticipat(ed) their concern” by launching a two-year study to make sure the commission’s visual standards were appropriate.

The study assessed falling number, wheat and flour protein, milling yield and water noodle dough colour at two and 24 hours, and included other standard quality tests, the CGC said.

The CGC considers mildew-damaged kernels in a sample to be a “subjective” factor in grading. Mildew’s main impact on milling wheat quality is in reduced flour brightness; a discoloured seed coat also can be an “aesthetic detriment” in food uses such as breakfast cereals.

While moderate mildew damage isn’t considered a major quality factor, the CGC said, it can be considered a “very useful flag” for wet harvest conditions and potential sprout damage.

The commission said its study reviewed samples of all grades of milling wheat from the 2014 and 2015 crop years that were selected, graded and evaluated for mildew content by CGC inspectors.

To make sure mildew was the only factor being evaluated, samples picked for review were ones downgraded based on mildew alone, the CGC said.

The study found “current mildew guides needed to be adjusted to properly convey the intrinsic quality of the wheat and therefore increased presence of mildew.”

The CGC said it also ran tests on the impact of mildew on Canada Western Amber Durum (CWAD) Harvest Sample composites and mildew guides. Tests by the Grain Research Laboratory showed the impact of mildew on semolina quality was “negligible,” the commission said.

The Western Standard Committee’s wheat subcommittee met with CGC officials on Monday to review the study’s results. The subcommittee then recommended mildew guides be adjusted in western milling wheat classes to allow for “increased presence” of mildew in visual standards.

The changes announced Friday now apply to grading in the CWRS, Canada Western Hard White Spring, Canada Western Amber Durum, Canada Western Red Winter, Canada Western Soft White Spring, Canada Western Extra Strong, Canada Prairie Spring White, Canada Prairie Spring Red and Canada Northern Hard Red classes.

Mildew — not to be confused with powdery mildew, a yield-reducing disease that attacks a plant’s leaves — turns up on kernels when field fungi develop under excessive moisture in unthreshed wheat.

Affected wheat kernel samples have grey-to-black mildew spores, typically attached to the brush end of the kernel; that discolouration may eventually extend onto the kernel and into the crease.

The “science-based” change in mildew guidelines “will put money directly back into the pockets of Canadian producers, while maintaining the quality of wheat classes,” the CGC’s acting chief commissioner Jim Smolik said in Friday’s release. — AGCanada.com Network

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“Right now, feed is pretty well on par with a lot of the base milling-grade wheats,” said Jared Seitz, trade manager with Agfinity, an online grain brokerage based out of Stony Plain, Alta.

“When you compare feed wheat with the milling market, we’re seeing quite a few farmers selling into (the feed market) because it doesn’t make sense for them to hold out for the elevator pricing,” he added.

“We have a very tight barley supply/demand scenario,” said Jerry Klassen, manager of Swiss-based GAP S.A. Grains and Produits in Winnipeg.

As a result, domestic livestock feeders are substituting more feed wheat in their rations and “we have relatively strong domestic (feed) prices compared to the world milling market.” The weaker Canadian dollar is also limiting imports of U.S. corn and DDGS, he said.

“With the world milling prices near historical lows, we’re seeing low-protein milling wheat move into feed channels,” he said, adding that “wheat will continue to move into feed rations until something changes fundamentally in the world wheat market.”

Seitz said current weakness in the global milling wheat market was weighing on feed prices as well, “but there seems to be a delayed reaction” as domestic buyers still have demand to fill.

The demand scenario is looking more bearish heading into summer, given the seasonality of the market and Canada’s declining cattle-on-feed numbers, according to Klassen.

Seitz said there was a possibility for some spot rallies in the summer months, before the new crop is available. However, he said, the window of opportunity for any rallies will likely be narrow, given that seeding is well ahead of the normal pace.

In addition, “if we continue to see prices declining over the next few weeks, by the time we get to the spot rallies in July they won’t be that exciting,” said Seitz.

Any rallies then would likely just bring feed wheat prices back to the levels seen currently, he noted.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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