Does Anyone Follow Futures Markets

[charliep]

Given the general lack of discussion about marketing and the usual on going discussion about other things, just curious if anyone follows futures and local cash prices.

[URL="http://farms.com/FarmsPages/Markets/tabid/214/Default.aspx"]futures prices[/URL]

<a href=" http://canola.ab.ca/dailygrains.aspx">Alberta grain and oilseed prices</a>

I even look across the border at Iowa and their prices.

<a href="http://iacorn.ncgapremium.com/index.cfm?show=31&mid=7">Iowa corn and soybean prices</a>

I realize the challenges many of you faced this past year and those of this spring. If farmers can't be optimistic in this market environment, then the industry is in real trouble.

To put corn into perspective, Iowa cash prices seem to be about $6.15/bu. Won't bore anyone with the math but a landed Alberta corn prices would be about $300/tonne.

Montana prices.

<a href="http://wbc.agr.mt.gov/Producers/pricing_current.html">montana prices</a>

[charliep]

Canola prices $13/bu.

CWB fixed price contracts $6 to $8/bu. If you signed a flexpro last July, add 85 cents/bu.

New crop malt barley - $5.50 to $6/bu.

Flaxseed - $15/bu.

[brian99]

Futures prices are generally wide spread and pop up on almost every ag site. Finding local prices is different. For instance I priced my cor last week. I knew what Chicago was at, but what's the discount for tough. This corn was 19%, but was keeping perfect. It was also light. What's the discount there? Does it change when you have both? Does the discount(s) change depending on the end user? So I took a price I made money with. Was I happy? Put it this way, I would have been a lot more grumpy if I had to screen it and dry it to 15.5%, or couldn't deliver at all because the bins were heating.

Got an elevator bid for canola last week for new crop $11.18/ bu. Buck and a half basis. I told tim to go blow. I guess my point is terms of a contract are as important as the futures market they are based on.

[tmyrfield]

Yeah, I watch futures prices and wait for decent basis contracts. But now I am spending more and more time on the weather websites trying to get some feel if I will be even able to seed a crop. November brought totally saturated soils with a foot of heavy wet snow sitting on top of the ground, creeks and ditches all running, sump pumps still running. Doesn't matter if the prices go to $100.00/bushel if you can't grow a crop. Farmers were admonished at the crop production show for not doing any grain pricing....industry is still not understanding the stress that some farmers are facing, very poor crops last year and uncertain prospects this spring. sorry to be a drag on a such a glorious Sunday morning.

[northfarmer]

we just priced some new crop canola off the combine at 12.50 net, not too agressive but have been selling incrementally as the futres rally......on the basis side we locked this earlier as the current new crop basis has widended as prices have moved up and local terminals have filled up harvest devilvery months....on wheat we have incrementally priced new crop hrww futures only at over 9 bucks a bu, whould net a big improvement over 2010 when we can fix the basis in Feb

with our fert and seed bought, and rising prices i like the trend....now just get a crop!!

[brian99]

I think farmers are in luck here. Not with the wet fields, sorry. I think prices are going to give you ample opportunity to price at a profit once yield prospects are more certain. A rare thing indeed.
As to whether a crop will be planted at all, ask how many years in the past 20 your land produced zero crop. This is Western Canada, the weather changes on a dime. Even Drew Lerner can be wrong (LOL). Don't give up in January.

[charliep]

Perhaps there is a need for the supply chain to share some of the weather
based risks in their contracts. Act of god clauses. Including a weather based
insurance product in contracts as a component.

Crop insurance. Will note Alberta has variable price benefit included in their
crop insurance as standard feature. Saskatchewan has it as an option.
Ability to increase coverage levels if prices increase between the time
coverage prices are established (winter prior to seeding) and the fall when
the crop is harvested.

Weather based insurance products.

[jrlee21]

The thing to keep in mind is if you can look in a profit On your crops.

[Fransisco]

Read something interesting this morning "the average stock trade
these days is held 22 seconds and the average currency trade 30 seconds."

I wonder what it is for commodities or futures trades?

[brian99]

Alberta has a corn heat unit based insurance, as well. Maybe that program can be expanded for other crops. The model would work in any province. A line company contract would be better, though. Crop insurance is slow and should be a last resort.
I'm working with Dean Dyck at AFSC on a couple of new alfalfa seed projects. There may be something for 2012 at the earliest. That's how long these things take.
It would make much more sense for Viterra(for example) to buy an ouption on your contract, and split the cost.

[charliep]

On the weather insurance based front, Wild Rose Agricultural Producers worked
completed did a project through the private sector risk managment progam
and I think has been launched in the market. I think Keystone Agriculture
Producers were involved as well. Insurance products can be expensive.

[ianben]

Hi Charlie
I mostly follow the market at
this site nowadays. Click on it most
days.
www.grainman.co.uk

Gives me most futures around the world
plus the ex farm price, spot, and with
wheat to July 13; Barley to July12;
canola may 12

Have you anything similar?

[charliep]

Most of the grain companies offer similar services and websites in Canada. As with the Glencore site, password protected and oriented to customers.

[cottonpicken]

One of these days we are going to see some
farms caught short in the canola trade

[charliep]

Not sure what you mean by short the market. A farmer will be short
futures but they will also be long cash canola. If a futures heads higher,
losses on the futures will be offset by gains on the cash side (other things
equal). Margin calls are a different thing. You have better have a friendly
banker or a way of cash flowing margin calls.