CWB Post Daily Domestic Malt Barley Cash Price and Lethbridge Feed Barley Price

[charliep]

Interesting the CWB is posting their domestic malt barley price (in store Vancouver) and
Lethbridge.

As a question, what percentage is the domestic malt barley sold to brewers of the total
malt barley pool? If a domestic malster were selling export malt in a off shore market
that could import European malt, what would the price be?

[URL="http://www.cwb.ca/public/en/farmers/contracts/cashplus/"]cashplus[/URL]

I will note the difference between the posted domestic price today ($245/tonne port 2
row) and the PRO $208/tonne port.

[Zaphod]

Charlie, the domestic price is the same as the export offer in the St. Lawrence. And the Lethbridge price is feed barley. I don't think there's anything new here.

[charliep]

Nothing new and actually good they have posted. My curiosity is why.
Should farmers use the domestic price as the bench mark for cashplus
values? $240 domestic price port minus $50/tonne CWB deductions gives
a reference price of $190/tonne. Assuming a 10 % hold back on the
cashplus reference price puts about $170/tonne on delivery with a final
payment (or what the additional value is called on cashplus) of $20/tonne.

What is not in the above is sales values into European competitive markets.
They would be well below these levels. Where is pricing on these sales - a
part of the $208 port or $153 actual elevator/domestic maltster price?

What does it say about the CWB sales target volumes this year? If they
avoid markets where European/Aussie is actively selling, how much is left
in world market? With a good US malt barley crop, how much business is
left to do south of the border?

The five year average on domestic human food and malt barley use in
domestic beer is about 170,000 tonnes or less than 10 % of the average
malting barley pool size.

[charliep]

From last week's emalt, current European malt prices are in the USD $145 to $150/tonne range or Cdn $155 to $160/tonne - this would be the competitive price the CWB would be using for both domestic maltster sales into these markets and actual malt barley sales. Current Montana 2 row malt barley prices (at least the ones posted on the ams website) are about $6/CWT (hundredweight) or Cdn $140/tonne.

Like most CWB posted prices (including Vancouver/St. Lawrence wheat prices), you need to be cautious how you interpret by including both customer and relative volume to the overall pool size. Again, just curious as to why they would post in the cashplus program area other than an indication as a target value to be used in negotiations with maltsters. If I take it one step further, what are the volumes on these sales and the implications for the overall malt barley pool.

A way out to lunch Charlie might suggest this is a vision for the CWB - continued involvement in the barley as single desk but no price pooling option.

[ianben]

Hi Charlie

Can$245 is £139 and my malt barley is worth about £85 ex farm,thats £90 dockside.

£90 is just less than can$160

We have aprox 2million tonne of barley available for export over half of which is malting quality.

No demand home or abroad. Neighbours full spec malt went for feed last week at £82 I believe.

I cant see many sales made at $245 if so CWB does get a premium.

Having said that my Coors contract harvest 09 was 2/3 at £140 1/3 £87.

2010 contract is Nov10 liffe feed wheat £7 and fixed 1/3 at £119 rest still to be priced.

[charliep]

Thanks ianben.

Current Alberta feed barley are those shown the CWB information. My brother (Calgary area) sold feed barley for $3.40/bu delivered feedlot over the next 3 months - the price quoted has quite a wide area in southern Alberta. Cash plus from mcfarms (hopefully I am getting right - apologize in advance if not) is $3.33/bu or $153/tonne - not sure whether delivered malt plant or picked up yard or includes things like trucking allowances. There should be an extra $15/tonne plus/minus final payment/bonus/holdback or whatever the CWB call it. Initial payments for malt barley are about $103 for Alberta with an expected final payment of $48/tonne (still a guess at this point and highly dependent on CWB malt barley pricing activities). A farmer may be able to squeeze some quality premiums, trucking allowance, etc from the maltster or exporter.

So in my brothers case (not selected but potential malt quality), his choices are $157/tonne in his pocket by January 2010 or play the waiting game for $103 initial payment plus a hoped for final of $48. No choice here.

[ianben]

Interesting Charlie

Delivered feed barley is roughly the same price in UK and Alberta.
Neighbours would probably be £88/tonne delivered £1/month think thats $156.78 over three months

Do you know if this is normal?

[ianben]

Plus sign doesnt seem to post.

First post should be Liffe feed wheat Nov 10 plus £7

And delivered feed barley price £88 plus £1/month

[charliep]

1 percent/month carry to store would be common business practice here.

[ianben]

http://www.fwi.co.uk/gr/graphs.pdf

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agc7604

Cant find a uk barley graph but barley usually at £10 discount to wheat.

[mcfarms]

Cash plus values for 09-10 up to this point have ranged from 5.50 -3.50 approx. Any business that might be being done now would be in the 3.30 range for new crop ( next year) if any business is being done. Charlie is right hauled barley for the stuff we custom combine direct in to the feeders last week at 3.37 delivered in right now. When I did my cash plus at 5.50 feed was 4.00 . I look at the storage as my trucking premium this year. So really the 1.40-50 malt premium over domestic feed in the early spring has all but disapeared currently. Not real positive it'll be back quickly.