CWB! Lowest price is the Law!

[SASKFARMER3]

Looks like our beloved CWB screwed farmers with High protein HRS again. World needs this product Saudis have cash to pay, yet the CWB blows out our product delivered to them for $240 MT. Wow were way lower than shit from USA. Hm and the CWB is doing an excellent job. HA HA HA HAH A>
Show me the money.

[bucket]

THats a delivered price as well if I read the news right.

St. Lawrence pricing is at $280/tonne

So they discounted the sale by $40 a tonne.

Considering the current crop conditions and where prices will be in October they just gave away 10% of the new crop.

To the wealthiest nation in the world who has decides that it is to expensive to grow grain in the desert.

At the very least they have said to the world "we are willing to pay almost as much as it cost us to produce the grain and by the way we are not short of money"

So the folks at the cwb give them a chevette price for a cadillac product.

Not too wise.

[Fransisco]

I believe this is the story you're talking about.

<b>Canada win shows US wheat 'uncompetitive again'</b>

Canadian victory in the Saudi Arabia's mega-tender for wheat is a sign that rival grain from the US has become uncompetitive on international markets again, following this month's rally, a leading analyst has said.

Saudi Arabia's grains authority, the Grain Silos and Flour Mills Organisation, said on Monday that it <b>had paid an average of $228 a tonne, including freight, for the 990,000 tonnes of wheat</b> it bought on Saturday from Canada and Germany in one of the biggest tenders of the year.

Half the grain was of 14% protein content, bought at $240 a tonne, and half at 12.5% protein, prices traders viewed as low.

"There was a view that US prices were becoming more competitive," Alex Bos, commodities analyst at Macquarie Securities told Agrimoney.com.

<b>"This result wipes out that possibility. It shows that the Canadian Wheat Board is still willing price competitively, lower than US prices."</b>

US prices were, at Monday's high, nearly 10% above a low hit on June 9, before the CWB revealed that up to 12.5m acres of west Canada sowings may be lost to a wet spring.

No fears?

However, he declined to rule on speculation by some in the market that <b>the CWB's willingness to sell old crop at low prices was a signal that it believed that new crop supplies would be bigger than some investors fear.

"One would think that if the CWB is open to offering wheat at a low price, it can't be too worried about where its next supplies are coming from," a London trader told Agrimoney.com.</b>

Mr Bos said that while it was "possibly" true that the CWB was becoming less worried about this year's crop, it was too early to make a judgement.

<b>"It certainly shows they have still got quite a lot of old cop stocks left,"</b> he said.

Prices reverse

Saudi Arabia opted for German wheat, which made up the majority of the order, because of its high specifications, Mr Bos added.

"Germany has high quality wheat, and in the abundance that Saudi Arabia wants."

The comments came as Chicago wheat lost early gains to stand 1.0% lower at $4.57 a bushel, for July delivery, in late morning trade.

Paris wheat for November also retreated, standing 0.5% lower at E141.00 a tonne in late deals.

[LWeber]

SKFARMER jumped the gun with my morning comments before the rest of you will get yours.



The Canadian victory in the Saudi Arabia's mega-tender for wheat is a sign that rival grain from the US has become uncompetitive on international markets again, following this month's rally, a leading analyst has said. "There was a view that US prices were becoming more competitive," Alex Bos, commodities analyst at Macquarie Securities told Agrimoney.com. "This result wipes out that possibility. It shows that the Canadian Wheat Board is still willing price competitively, lower than US prices." However, he declined to rule on speculation by some in the market that the CWB's willingness to sell old crop at low prices was a signal that it believed that new crop supplies would be bigger than some investors fear. "One would think that if the CWB is open to offering wheat at a low price, it can't be too worried about where its next supplies are coming from," a London trader told Agrimoney.com. Mr Bos said that while it was "possibly" that the CWB was becoming less worried about this year's crop, it was too early to make a judgment. "It certainly shows they have still got quite a lot of old crop stocks left," he said. (AGRIMONEY) Western Canada - where the lowest price is the LAW. Brought to you by the Liberal and Conservative governments over the past 25 years. Laugh and the world laughs at you.

[Fransisco]

So once again we ask, " where is the premium"?

And can readily see there isn't one.

We ask, "where is the wheat boards pricing power"?

And we see that it has none.

What we do see, however, is a race to the bottom, and the wheat board is the one leading the charge.

[Fransisco]

Larry, I'm glad you listed the Conservatives as one of the parties responsible. Far too many people still give them a free pass on this one. They've had plenty of time to change things, they have the power to do so, but they've made up their minds to do nothing.

[charliep]

I assume this is the new crop position talked about elsewhere. Hopefully the CWB is fully covered on this sale with a futures or has the grain contracted with farmers. A seasoned grain vetran once suggested the CWB should never sell something it doesn't have or can't cover the risk on.

Tongue in cheek, maybe the CWB is planning on going optional origin on this sale itself and perhaps source from the US at a profit. This money could be used to prop up the contingency fund.

[sawfly]

i do not know if this was a bad sale or not.
but in the international market the lowest price is the law.
do you think the board should not sell anything.
let the US and Germany fill the tender.
I contracted 80% of my HRS, price is terrible but i didn't want to keep it all.
held 20% back in hopes of better price next year.
you can either price it where it will move or store it. take your pick.

if the board had only taken 30% , everyone would be screaming about that.

i offered it they did what they had to to move it.

i do not have the luxury of holding out waiting for better price . with a guarantee of being topped up to a loan rate price .
i did sell some at a decent price on a FPC , which we all could have.

fire away i will keep my head down

[bucket]

Just talked to the cwb.

They won't tell tonnage or price. Funny, the world knows but we can't.

The tonnage should be known in the next day or so.

But why so secretive. They sold grain below their port asking prices into a delivery time frame where the grain may not be available.

[charliep]

Not specific but some details below. Tonnage will be interesting.

[URL="http://www.futurespros.com/news/commodities---futures-news/interview-saudi-gsfmo-paid-avge-$228-t-c-f-for-big-wheat-buy-131000"]saudi tender[/URL]

[charliep]

sawfly

Don't know if a good or bad sale either. It also likely fits with the CWB sales pace model the board of directors uses for monitoring operations performance in the annual report.

In making a sale, the key issue is its new crop with lots of production risk in western Canada (hopefully not relying on old crop supplies although I guess a way to clean the elevator system out if the CWB could negotiate October shipment). In a world of unknowns, it is a question of how the CWB manages your risk (i.e. farmers) given they bare no risk themselves as an organization. No money - no risk.

[parsley]

There is a magazine named, "Bakers Journal" which services the baking trade

2. The annual subscription cost is $31.80.

3. In the June edition, which arrived last week, Cargill's 'Horizon Milling' advertises on the inside cover page, advertising flour and "so much more"

4. On the first right hand page of the magazine, the CWB has paid for a full page ad, with their logo, a red maple leaf, with the familiar wheat kernel head on the left of the maple leaf and the CWB letters placed to the right side of the head.

Note: Actually, the logo itself does not differentiate between Western wheat and Ontario wheat, who is fast becoming our most robust competitor.

5. Underneath the logo is the message for bakers: " Canadian Wheat Makes it Good"

6. At the bottom of the page, beneath a photo of baked goods piled in front of a stainless steel stove, is the sentence:
"Start with great ingredients. End with a smile. Ask your supplier for flour made from 100-per-cent western Canadian wheat."

7. Keep in mind that each flour miller, such as Horizon Milling, or P&H Milling Group, has the following options available to them when buying milling wheat:
1. EU wheat
2. American wheat
3. Ontario wheat
4. Captive Western wheat (Western farnmers have no option but to sell to the CWB)

8. May I be so bold as to suggest that the CWB cut the crap and simply bribe each millers' purchasing agent? At least farmers wouldn't have to pay advertising firms for magazine production costs. Pars

[Choice2U]

Sawfly....you don't know if the CWB made the right decision or not?? Why is it so hard for CWB supporters to understand that the decision made by the CWB of when and how much to sell and at what price should be MINE and not theirs. My only choice now is to play the CWB lotto games of FPC or BPC in which they have set the rules. Oh, and I have to pay a fee to do this. I could stay in the pool and TRUST them like you but I, unlike you, do not want someone else making those decisions. I don't need a DADDY any more. Too bad some farmers have never grown up.

[bucket]

choice2u

Well said.

[cityguy]

So a few things. First off, just to get it out of the way I certainly believe it's your wheat, your business, only you can best manage it. Second off, politicians of all stripes have a hand in the current system - red/blue/orange/pink - all of them. With regards to the Saudi business in one of the stories it was noted that the German's did the majority of the business. Fact is that they did 16 of the 18 cargo's and the CWB did two cargo's for shipment sometime between October and April - two. And they were of the 14% dry matter (europeans always quote protein as dry matter basis) which is our equivalent of about 12.2 protein. So it's not a "high" protein sale and if anyone is comparing to a "card" price then make sure you compare the 12.2 or 12.5 card price. As an aside, this past weekend the Egytians bought a couple of cargo's of hard wheat, one from Russia, one from the Ukraine. Am guessing that the CWB is figuring with all of this moisture around, with N leeching away, there's going to be more low protein out there again this year and if you have to sell that stuff it's the germans/russians/ukraine that you have to compete against. So they "test" the market with a couple of cargo's. What's scary is we don't know if the CWB price of your wheat pulled that $240 average up or down. As for US wheat, it's on the outside looking in relative to a multitude of origins - again. That being said, the US farmer is simply making the choice to maybe sell half at a relatively "high" price and keep the rest at home. Here, the CWB basically cleans out your wheat bins and whatever it takes to get the job done. They may pick and choose a few destinations where they can get a small premium, but they have to get down into the muck if they want to move it all - or at least all that you've collectively given (key word - given) them to move.