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Grain market analyst shares optimism with local ag producers

‘Weather the Storm’ is the message Peace Region ag producers have been hearing a lot these days.

That was a large part of what Market Analyst Greg Kostal had to say during the Grain Market Outlook seminar at the Peace Country Classic Ag Show earlier today.

Kostal says prices are low right now, but he thinks the market can only go up, though it might take some time to get there.

“Riding it out I think is a good way to put it into perspective. We’ve had a year to two years in some commodities where prices have sagged, and the historic charts would say that we would be in a position to grind sideways for one, and if we were to look at this in another one to two years, I think we’re going to see a better price prospect outcome.”

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He also discussed what he calls the “Made in Canada Congestion Problem,” adding that the spread between port and elevator has never been wider.

“The weakest link in the whole distribution or transportation is inability of rail movement to surge to this large crop size. So to regulate that and find equilibrium, speed of supply versus speed of demand, you’ve had the two extremes.

Kostal says he is confident that producers will see prices picking up by 2015 and 2016.

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