November PRO Release

[charliep]

[URL="http://www.cwb.ca/dom/db/contracts/pool_return/pro.nsf/WebPRPub/2010_20101125.html?OpenDocument&CropYr=2010-11"]November PRO[/URL]

Wheat Down Slightly in Latest CWB PRO for 2010-11
Winnipeg -- The CWB today released its November 2010 Pool Return Outlook (PRO) for the 2010-11 crop year. Wheat values are mostly down, between $1 and $4 per tonne, from last month's PRO, depending on class, grade and protein level. The exception is No. 1 CWRS 14.5, No. 1 CWSWS and feed wheat, which have all increased slightly from October. Durum is up between $ 1 and $6 per tonne. Malting barley is down $7. Pool A feed barley values are unchanged, while Pool B is down by $6 per tonne.

[charliep]

Nothing surprising with the exception of malt barley.

Malt barley supplies are tight around the world. Know our quality is crap but incremental business above current sales activity should be at higher prices. A person has to ask how much malt barley business is currently on the books with the domestic maltsters and at what price. If maltsters/exporters were to source malt barley, I suspect would have to be cash plus.

[bucket]

Did you anything about the price pace?

They seem a little lacking as to where they are at sales wise, and that could be a price influence.

But then again maybe its a secret.

[charliep]

You will have to wait until the CWB commentary/updates to their website. The pricing pace off the October PRO was 30 % sold. Sell below.

[URL="http://www.cwb.ca/public/en/farmers/producer/pace/calculator.jsp"]pricing pace at bottom[/URL]

[charliep]

Will leave your questions for others.

Was going to post in the PRO but kinda applies to your question. Perhaps also relates to unintended consequences.

I note the CWB is struggling to get higher quality/higher protein wheat into the system. At the same time, the fixed price contract is encouraging farmers to deliver lower grade/protein wheat ahead of the upcoming adjustment payment.

The spread today between a 1CWRS 13.5 and a 3CWRS today on the PRO is about $1.60/bu (September spread was very similar). The spread on initial payments is 90 cents/bu. If you believe this, then a 1CWRS 13.5 will get a $70/tonne and 3CWRS $50/tonne just to bring the spreads in line.

the implication is farmer who delivers 3CWRS on a fpc 2 days before the adjustment payment will be $20/tonne better off than the farmer who delivers 2 days after the adjustment.

Without going into any great details, I would as a farmer trying to get the best price for product deliver 3CWRS against my FPC as soon as possible (knowing what I am saying is impossible given elevators and the last thing they want is more 3CWRS).

When you take the price signal out of delivery, a lot of really stupid things start to happen like this. the best solution would be for the CWB to use market based spreads for the FPC the same way they do for the daily price contract a couple of years ago and the way they do it every day on the sales side to domestic mills/US.

My question to a CWB director hopefull is why after 10 years hasn't this change occurred? Should things be based on market signals or simply a lotterly/luck when you can find space at an elevator around an adjustment payment?

[charliep]

I also find the EPO premiums on malt barley/how expensive they are relative to wheat. Recognize the difficulty in managing risk malt barley but this may also an indication that the PRO is on the high side/potentially could come down - a high percentage of this years poor quality/restricted volume malt barley crop has already been priced at low values with limited to no opportunity for more sales at potentially higher values. It is potentially a year when feed barley and malt barley payments are similar.

[parsley]

"How are we to be fair to the folks on the ground at the CWB... who work hard and do not make the problems the CWB cause to our farms? "

IMHO: It is my observation, and my belief that every management-employee at the CWB is well aware that the CWB is not an institution that serves farmers; rather. it is there to provide them with a good paying job with better benfits than most institutions offer, and the undivided loyalty of every socialist generation who succeeds them who will continue to crank out their pensions.

IMHO:CWB employees will do everything within their power to preserve their job, including running the pools dead broke if farmers won't grow wheat or barley any longer They know if they sell South Dakotans grain they will still be paid. they are smug and secure.

Simply put, it is my belief that the CWB does not give one bloody damn about any farmer.

Parsley

[Burbert]

Yup great post Tom. The price a grain will skyrocket the day the CWB ceases to exist. Or tank is more likely, when the multies sense they kin do what they want with Comedian farms and farmers.

[bucket]

Keep growing wheat for the cwb and get nothing for it burbert.

There is an incredible acreage battle going on right now.

The grain is moving okay for the time being but come may/june of 2011, elevators will be laying of staff.

The canola crush plants want canola in the ground as early as possible so they don't have to shut down in the middle of september next year.

The cwb will still be trying to figure out how to fill the orders with american grain they are going to be paying dearly for.

[parsley]

burbert, would you agree that the people who work at the CWB are only interested in their salaries? Would you agree you could lock 3/4 of them in their exercise room with their individual blackberries with games apps, for 75 days, and no buyers of wheat and barley would even notice that they were gone?
No extra sales would be made or lost?

Pars

[wmoebis]

One thing is for sure!

We got rid of 3/4 of the family farms and nobody noticed.

[Hopperbin]

Wmoebis, what does that have to do with the CWB or this post? If your worried about our family farms for what ever reason start a post on it.

[parsley]

wmoebis,
I agree.
Family farms have decreased dramatically.

But wheat, over the last 60 years, run by a state marketer, has NOT sold well at all, has not kept up with the price of tractors, or rubber boots, or magazine subscriptions.

Why hasn't it?

[parsley]

And wmoebis,

Those small family farms, most of them, have DEPENDED upon selling wheat, have taken great pride in growing wheat; in fact, placed their trust in a sonofab%^$hin' government marketer to look out for them so they couild stay afloat.

3/4 failed you say.

And Wheat Board staff have burgeoned like a circus fat lady, bloated and useless.

Surley you will at least agree wheat prices are not inflated. Pars

[parsley]

You can't punch him, so at least come up with some sort of an argument, hopper. Pars