Russian Wheat

[TOM4CWB]

Cityguy,

If the CWB had any brains... they would have been selling this grain last spring/summer. That is what pools are supposed to be... selling over 18 months. The CWB says they are supposed to be 95% sold by the end of June for the 09/10 pool.

On top Egypt takes almost exclusively soft red wheat... which is of much less value than our HRW.

If the CWB sells our HRS/HRW to compete with soft red... we are really dead in the 'designated area'. Is that what you suggest the CWB are doing? What 'premium' are you suggesting they actually achieved? Are your prices for HRW ordinary... if they are they do not in any way line up with average prices paid US HRW growers over the past year!

[cityguy]

Tom -

You are right that if the CWB were selling into Egypt then they've completely lost it. It's just that in this thread it was being implied by others that the CWB was getting outpriced into that market by the Russians and that was a bad thing. Even worse, some were suggesting that the Russians were buying Canadian wheat and selling to Egypt. Huh??? There has been some Canadian wheat sold to Egypt this crop year - Ontario wheat, but not western wheat.

As for Egypt, they were primarily a US soft wheat home - 15 years ago. The US had all sorts of credit deals and such plus GASC was the major buyer. Over that time that's mostly changed with credit not in the mix so that soft wheat demand has been replaced out of Europe. However, the demand for hard wheat has increased significantly over the years as the privates have taken over a greater part of the market and that's the demand that the Russian program has taken over.

What's an interesting point is what percent sold should the wheat board be sold. Think their last PRO had then something like 3% sold right now with an aim to be 25% sold by the end of September. As a comparison the US open market has about 20% of their projected export sales on the books right now as the combines roll. What percent sold should the CWB be when the Canadian combines roll, whenever that may be? Is 20% too low, is the CWB's 25% about right (though that % goes up each day given the direction our crop is going)? Or should they be 50% sold on the basis that they have 18 months to market and harvest is about the half way point of the marketing cycle? In the short term you guys are stuck with their decision so what's your advice to them? And recognize that you can always do something for futures/options on the side.

[bucket]

Considering the current crop conditions maybe the cwb ought to wake up prior to any sales are made.

[cityguy]

A broken clock is right twice a day so maybe asleep at the switch is the right plan for right now.

[Choice2U]

Therein lies the problem with the CWB. It is hard enough evaluating the world market and developing a marketing plan but now we have to add in a guess of what the hell the CWB is up to. Did they sell based on moving a big crop (volume) or did they sell to maximize price and carry over more? Now, I'm supposed to guess which was their priority, whether they were consistent with that attitude through the year or did they change part way. With all this BS up in the air, I now have to make my farm work with a FPC or basis contract or stick with the pool. What a pile of crap!!!! It all goes back to trusting their decision and I hate letting someone else make decisions for my farm.