Wheat sales

[boarderbloke]

Charliep, I realize that you won't do this yourself, so I will! People here should be reminded that Nov 6/2010 "charliep" posted a message giving everyone a heads up on the positive basis for CWRS wheat. The high positive basis was an anomaly for FPC. On Nov 3rd basis could have been priced at 36.61 DEC10 and 28.35 MAY11.

What is really sad is that posting this message in a "commodity marketing" form, NOT ONE PERSON commented or replied, IMHO, I think that speaks volumes about the state of farm based marketing in western Canada, and perhaps why we do not have dual or open marketing for wheat.

[boarderbloke]

..MGE wheat kicking a$$ again....and loving it.

[charliep]

VK58

With a caveat I suspect the January will increase and the CWB indication 60 % priced end January, you would likely need a $1/bu ($38/tonne) increase in sales prices from January to December to generate the $15/tonne difference in the fpc. Not including cost of money/interest.

[charliep]

A strategy would be to wait until the PRO is released in January. I would expect will be $10 to $15 higher but only a guess.

Your risk (not likely) is the CWB shuts down the FPC program early. Perhaps equally interesting would be the CWB decision to extend the program beyond January 31. Strangely enough with the adjustment and spreading the fpc pooling risk over the whole pooling year in line with the pricing pace.

[charliep]

Meant to say in the say sentence that extenting the FPC may actually be a good thing for the CWB risk management program.

[charliep]

thanks for the compliment boarderbroke by the way. Hate to be the one who always ends posts but seems to the way. Except with Parsley.

Everybody wants a buck a bushel more by calling the market. my experience is getting a buck a bushel is possible but more likely doing a bunch of things right - not the magic bullet.

Apologize for a sports analogy but why I think market analysis and curling are similar. Call a shot with a plan. Be prepared to call sweeping. Be alert as a skip and prepared to change. Take the consequences if things go really bad. Celebrate success. Always another end/shot.

[VK58]

Thanks Charlie, been discussing this issue over the breakfast table with my ag economist son. Our back of the envelope math indicates a need for a $1.50-$1.75 increase in Minneapolis spring wheat futures over the last 40% of projected sales. This doesn't however account for premiums or discounts for protein levels compared to the base grade.
At present it looks wise to lock in the spread on lower pro/grade, possibly leave the higher protein and grade wheat in the pool

[charliep]

That would be my strategy.