The feed wheat futures price lows set at the end of December were not only March 2005 contract lows, but also the lowest close for the nearby WCE feed wheat contract since the par pricing region was moved from Thunder Bay to central Saskatchewan in July 2001. The previous record low was set in mid-July 2003 when the October feed wheat futures contract closed at $110.00 per metric tonne. The October 2004 contract first closed under the previous low on September 3, 2004 and continued to trend steadily lower, losing another $27.50 per tonne through the end of December.
The fall in feed wheat prices has partially been due to the price pressure seen on feed grains in general, as the CBOT March 2005 corn contract set its contract low of US$2.0100 (C$97.00 per tonne) on December 10, 2004 and after a small rebound ended December at US$2.0475 (C$97.20 per tonne). In the middle of December the nearby WCE feed wheat - nearby CBOT corn spread traded at its largest discount since the feed wheat par region moved inland, a drop of over $35 per tonne since the recent high set at the end of June 2004. In order to clear large supplies, feed wheat must continue to replace other grains in feed rations either domestically or in the export market.
