Feed Wheat Australia

[malleefarmer]

All i can find out agstar is that its a pool operator, there are about 7 companies offering various pooling products so cant help you out exactly.

Cargills dreyfus glencore etc who operate daily in the cash market for export wheat do back to back sales so no risk for farmer or trader or buyer as they know exactly what they have bought from which ever international company each day and can pull the pin any time,which has happened numerous times this year prices withdrawn by mid afternnon once there allocated tonnage is full.

And your right agstar when looking around the world at feed wheat prices on the internet it appears that australia does actually have cheapest prices, probably due to the amount we have and domestic issues are keeping a lid on things.

[Vader]

takes nerves of steel to bid the price up in a situation where there is a surplus. Much easier to discount relative to other producers and secure the sale.

[charliep]

It stands to be seen whether nerves of steel work in this case. Perhaps the
highlight is the Aussie has opened the Chinese market up to feed sales and is
doing business. Where are the CWB feed wheat programs?

The lack of movement on feed wheat of western Canada's 10 MMT plus
available supplies has meant lower prices in the domestic market. The CWB
may be able to brag they did higher prices on low volumes but the overall
impact on a farmers bottom line when domestic sales are included is less
money in their pocket.

Perhaps the other element of pooling is the fact that sales have been made in
this years pool (60 % to the end of January) and these sales are a net drag on
the overall returns. From the prices malleefarmer farmer has provided, their
feed wheat prices are no different than our own. Premium or surplus the
CWB brags about is irrelevant to western Canadian as to the money the put in
their pocket. Again the Aussie farmer has movement and the right to choose
when they sell.

[$short]

Isn't the monopoly supposed to have the ability to bid up the price? I thought that is what its intent was or am I missing something here?

Where were our "nerves of steel" when the Durum was sold at a discount that has screwed the pool for the entire crop year?

[agstar77]

So you believe the CWB should undercut the Aussies to make a sale? Interesting.

[charliep]

Perhaps you can help with the question as too why US corn prices are $6/bu
south of us and yet domestic feed barley prices are $3.50/bu ($170/tonne)
and feed wheat $5/bu ($180/tonne). Nerves of steel are one thing but lack
of arbitrage/inability to sell into a higher market is quite another. How
much feed wheat is the CWB prepared to carry between crop years? Impact
on farmer cash flow? Who should make this decision?

[charliep]

Didn't say that.

Why wasn't the CWB already doing this business if the opportunity existed? It
would appear the Aussie developed the market. They have a 10 MMT problem
like western Canada does. The difference is they are doing something about it
and in a way that leaves decision making about price and whether to deliver in
the farmers hands. Discipline of the market.

[agstar77]

Mayo was bragging that Viterra had 95% of the SW Australia handle.

[parsley]

Nice to have you back on vader. Credit to you that you are one of the few directors to reply/comment online. Pars

[mcfarms]

Charlie

Can't even begin to tell you what a frustration marketing is this year . Have wheat that germs 94 percent and has decent falling numbers but is still graded Can Feed under our ancient and non relevant visual grading system. I have sat and watched this 200 percent epo which I had hoped was a geniune attempt by the board to provide true price signals to producers. It has been under my calculations of what business should be done at by quite a bit most everyday. It appears the philosphy is the same as the malt barley cash plus which makes a bid but holds an undisclosed "fee" back to support the internal working s and cross subsidization of the pools. 3 days ago without I calculated domestic feed bids in our area, the fixed price contract , and the EPO they were on the same day within 2 cents of each other. IMO the window to make premium sales for feed wheat is limited as Austrailia will likely make the sales based on preexisting reealtionships into Korea and other asian feed wheat using countries.


Not fully sure but based on what my experiences are would the markets in asia easily change feed rations ie corn to feed wheat as it seems that once they get something they are comfortable with in their ration it is hard to comnvince them to change. South Korea is a major user of feed wheats but South Korea is also in the midst of a huge FMD outbreak which is going to really cut into feed usage right now.

I still remain bullish on corn so in theory the feed wheat prices should move up or at least they would if we had the ability to capture futures values back to feed wheat sales by having a proper feed wheat basis under the board which it appears we don't.


Right now I believe the only way to capture proper feed wheat prices is to do your own cross hedge by holding corn on paper and forget about the CWB showing proper basis levels through this EPO.
The EPO appears to be showing us one of two things either the board is taking as charlie says 20-30 dollars atonne out of western canadian farmers pockets or they are disinterested in attaining decent prices for our products and their way of marketing this crop is similiar to blow it out the door just to get rid of it.

If we only had one channel on the TV and it knew it would the programming be fresh , cutting edge and innovative?

[gregpet]

agstar you said:

"So you believe the CWB should undercut the Aussies to make a sale? Interesting."

The CWB always spews the propaganda that an open market would drive the price down. Why is the CWB not using its 'influence' *sarcasm intended* to bid the price up?

[charliep]

mcfarms

Same question was asked at the CWB meeting last Friday at crop production days.

The highlight of the meeting was the multiple grades, proteins and other quality factors/intrinsic value to wheat. A challenge as we move ahead this year and try to improve price levels/discovery. No one disagrees. No one seems to know how to approach the issue however.

One of the comments at this meeting was a US company has ownership/can move wheat with a attribute like falling number through the whole logistic system elevator to terminal at port. They can manage quality because they have control - thus they can offer premiums based on falling number. They can also be held accountable to it.

The Canadian system is one of blending almost at every stage. No one can be held accountable for end results (CWB, CGC, grain company, railway, etc.). Don't know if true but a point made.

[malleefarmer]

I think alot of the above comments are true.
When you have a mountain of feed wheat which you have never had before you have to start somewere and sell in a rising market and if each sale is higher than the prevoius, you build a half decent price. Plus talk of drought in china and other parts maybe they are buying before price heads north in a hurry.
Also it may not neccessarily be under cutting it could be a case of china putting there cards on the table saying this is our buy price for this week take it or leave it, as there is so much feed wheat in the eu,canada and australia they will test the market with the deals until they get a taker?? Anyone believe that theory, but guess you could still argue australia may be a weak seller?

[BTOfarmall]

Whoo da Heck is dis Darth Vader Guy???

Sounds like he always wants to take da Easy way out. Kin't handle Life.......


?????????????????