saudi wheat

[cityguy]

They're in for 1 million tonnes Oct-May, basically half their needs. Should the CWB stand in and compete and sell something or should they simply back away. At the very least, should they price it against US replacement? Or should they basically offer at a made in Canada price for 2-12.5's and what price should that be? Suspect that they'll look at any advice before haveing to make an offer but won't be too interested in advice after the fact.

[bucket]

Considering the crop condition, they should wait. Pass on this one or they may end up buying grain from somewhere else to fill it.

BUT, the fact they are taking everything right now, the sale may be done already at a shitty price.

Buyers of our grain are not stupid, they have better crop survellence than we do. Even though we pay dearly for the service we are not privy to it.

[cityguy]

It's a very safe bet that they don't have something pre-sold against the tender. Think they're just in scramble mode against other sales on the books with delayed seeding and lack of deliveries. Any Saudi sale would be a new sale. Remember, the tender is for oct through march.

[furrowtickler]

If your looking at buying a truck today and it 30,000 but the last of the deals deals are up and the new ones may be 45,000 would tou try to buy now? They now for sure whats goin on. No different than the line companies last week tlleing guys that $8.50 spot price canola is fabulous - gotta sign up today. Bucket you are right on again - the market new ***in well what was about to happen.

[bucket]

My point is - did the cwb???

Our pros should have started spiking long ago with the indication of low protein wheat world wide.

Instead, the ------- market genius at the cwb blew out our best quality crop in ten years at bargain basement prices.

I guess though, if a person was reading posts from long ago it was quoted that larry hill was saving his durum for the 10/11 crop year. Someone knew but most of us can't wait a year to make money while living off the backs of western farmers. Self serving bastards.

[bucket]

city guy.

The current crop is 100% called and accepted and the new crop isn't in the bin yet.

They may be buying feed wheat this year.

More prudent to pass on the tender.

[Choice2U]

Cityguy - You tell me if their mandate is to sell all we grow or to maximize the price with a carryover of, for example, 10%, 30%, 50% of sales of the various grades and I'll give you an answer.

[cityguy]

Yikes - loaded question!!! Let's go with this. On durum be only 50% of world trade when durum is a discount to spring wheat, just make sure the 3's / 4-5's are gone.

On wheat - secure maybe 5 million tonnes of customers that pay US equivalent prices (or higher) year in year out. Then work your way down the list of buyers till it's basically all gone save for domestic needs. Couple of things to keep in mind. Have to keep back quality (1-13's and higher protein) to take care of Japan, keep back a little bit for August and September exports. Long story short, this past year was a low protein nothing special crop, so effectively just move it out at the "market". What the mandate probably isn't is only sell into markets at US price equivalent (on a delivered basis) otherwise you start stacking up the stocks in Canada. Also - sell about the same amount every month, roughly.

But it's your wheat - sort of - what do you think their mandate should be. Sell it all at the "market" or sell only at US equivalent values and just accept that the carry out may grow?

[parsley]

Canada's CWB targets Saudi Arabia
Looking to markeet wheat.

Who targets Canada?

http://blog.familyroach.com/a-hellmans-ad-a-perspective-worth-hearing

[Choice2U]

There in lies the problem with the CWB. Farmer 1, an older farmer with grain in the bins not needing cash flow, might say the CWB should sell everything because he/she (I don't mean you Parsley) held their own production from the board to take advantage of any future protein premium. Farmer 2, a young farmer needing cash flow, would say the CWB should sell everything because they need as much revenue from board grains so that they can hold non-board crops to take advantage of better pricing opportunities. Farmer 3, an old staunch CWB supporter with money wants the Board to hold back and just capture protein premiums because they "trust" the Board. Farmer 4, took out production contracts on non-board grains, doesn't need cash flow, so they want the board to hold back and only sell what gives them the best price. They dislike the board but have guessed what the board's intentions will be and subsequently did a FPC or basis contract on a smaller part of their production and will see how the market develops. I just gave you 4 scenarios that a CWB decision either hurts or is aligned with the interests of an individual farm. Some will lose and some win in the CWB lottery decision. Only CHOICE allows for a win win. If I want to be part of the CWB and take my chances with them, I'm in. If I want to go it alone and read the tea leaves of the open market, I'm out.

Bottom line - whatever the Board's decision, it will not necessarily be in the best interests of each farm. Asking what the CWB should do in this blog is a waste of time because we will each have our own answer for different reasons. Once again, the "collective good of all" is a fallacy so give me the right to do what I want with my grain and you can go on "co-operating by choice" with your neighbors.

[charliep]

Always an interesting discussion about buying local. A question at USDA highlighted the dichotomy of promoting healthy diets by including more raw fruit and vegetables in diets versus buying local in the winter time. Consumers decide what they buy and when they buy it.

To relate the heading, Saudi Arabia made the decision is too expensive to grow wheat on the desert (similar perhaps to western Canada reality of green house crops in the winter).

On the topic, the Saudi will tender. Results will reach the trade and market eventually.

[charliep]

Always interesting to google to find out details on the newswires. Note the quality required (higher protein) and shipping period (October 2010 to April 2011).

[URL="http://www.arabianbusiness.com/590740-saudi-arabia-tenders-for-990000-tonnes-of-wheat"]saudi wheat tender[/URL]

[bucket]

On a related topic.


Japan bought 126,500 metric tons of feed wheat for shipment between July 11 and Aug. 10. Of the total, 111,000 tons will be sourced from the U.S., 17,500 from Canada and 18,000 from Australia.


Feed wheat, really, where is the cwb finding that. Must be that "premium" Japan pays. Most feed wheat from previous years has been blended into higher quality. Just keep those premiums coming.

Nice sale considering the current crop conditions.

[cityguy]

One thing to clarify on the Saudi protein - the 12.5 / 14.0 protein is basis dry matter, making the 14.0 protein really 12.2 basis 13.5 moisture that Canada measures protein against. So these are high protein winter wheat sales/ low protein CWRS sales.

Am going to presume that the concensus is that given all the restictions that the Canadian wheat "market" has to deal with is that the CWB should simply pass.

[TOM4CWB]

Cityguy,

There are thousands of t od select high px winter wheat that the CWB refuses to buy.

Instead we must deliver this highest quality WW at a $20/t discount. The only 'premium' being extracted... is FROM our farm's bank account. I suppose this is the true purpose of the CWB... to minimize the cost for customers.

Without competition... the CWB are masters with proven morals... of the lowest value.

With all the low px winter wheat in the US... obviously the CWB has the high quality monopoly market to themselves... at 'designated area' farm price of $3.25/bu CDN... and many of us who had 2009 yeilds of 25-30bu/ac.

A loss of close $100/ac.

These people (Selling our wheat at the CWB) must think they are truly 'heros'!