New HRS

[chuckChuck]

If arbitrage is so efficient and effective why are there different prices in different elevators/markets for the same grade on the same day in many special crops and non board crops? If you check the US system they also show variation that is not accounted for by location. Where is the arbitrage?

[chuckChuck]

Checking. Have you not heard that many industries are concerned about the holdups at US borders because of increased paperwork and security compliance issues? Do much importing and exporting? Apparently not.

[chuckChuck]

How is arbitrage working when Fridays closing bids from SE Montana ranged from $8.52 - 9.51 for 14% DNS? Does arbitrage not exist in SE Montana? If it arbitrage doesn't work in SE Montana do you think there might be times when it doesn't exist between Canada and the US?


US 1 Dark Northern Spring Wheat
13 pct 14 pct 15 pct
Billings Area 7.73-7.88 8.53-8.68 9.13-9.28
Golden Triangle 7.24-7.91 8.44-8.71 8.99-9.11
Great Falls Area 7.75-8.33 8.47-9.15 8.67-10.35
Northcentral Mt 7.86-7.98 8.66-8.78 9.26-9.38
Northeast Mt 7.00-7.33 8.20-8.53 9.20-9.53
Southeast Mt 7.12-7.31 7.92-8.51 8.52-9.51
Southwest Mt na na na

[Fransisco]

All while the CWB's fixed price contract for spring wheat at Fridays close sits at $6.98. A buck fifty to two bucks below what you've posted. And you think that's all perfectly normal? Wow! Talk about naive.

[Jfreedom]

Hey Chuck check non board prices in Canada
there not all the same on any given day either.
I'm starting to think you are over the top naive or
not really involved in an actual farm or you would
know this . I don't intend on crossing the border
once to get the same or better price for my grain
the posted US price is as close to world price as
you can see and the beauty will be that it is all
transparent in an open market .

[TOM4CWB]

Chuckchuck,

We sold some off the Combine canola... all the way from No offer at all... to one of the lower basis offered this summer.

It all depends who has sales made... and when they need to be shipped.

At least in Canola the CWB isn't running around 'price discriminating/discounting' using growers money from a pool account!


By the way... more often grain prices in western Canada are higher on non-board grains... than the northern US... as many growers have noted (lower handling and freight). Too bad it isn't this way with CWB board grains.

If the CWB would have at least equal the US northern wheat and barley prices... it would have meant at least the CWB wasn't giving away our grain.

I can remember in the mid 2000's... the CWB claimed they could match US prices any time. That sure didn't last very long... except for organic grains!

Ever heard of the 'good cop bad cop' negotiation method???

The CWB has totally missed the opportunity... the buyers and end users know this... and force the prices DOWN.

The CWB 'single buying desk' is used by our customers/endusers to cheat western Canadian growers out of their rightful returns. I have had overseas millers tell me this straight to my face.

Who did you say you worked for Chuckchuck???

[jamesb]

I agree that current board crops will show a price similar to the US prices based on similar freight costs when things open up. If the US prices continue to be higher for a time its easy to haul into the US. Once you get the paper work done up once its very staight forward. Lots of farmers and custom haulers are moving canola into ADM at Velva, ND. I know of a company is already looking for oportunities next year. I for one am very interested to see what we can do with the winter wheat we grow than usually ends up in the feed market. A neighbour a couple of years ago was dumping winter wheat at a feed mill and the trucker behind was a North Dakota farmer up dumping feed peas and this guy could'nt believe the neigbour would dump the nice red wheat for feed.
As I said, i'm looking towards next year.

[SASKFARMER3]

Rah rah, yea no shit the CWB takes their cut
then cut for screw ups, then cut for bonuses even
if they are the ones that screwed up. Minus the
grain companies, pennies to the farmer, just
priceless.

[BTOfarmallll]

Gagstarr77 ain'tcha gonna answer Me & RD414's Questions???? Thank you kind, kind Sir......

WoodChuckWouldChuckWood, Close The God Damn Border to Trucks, Theys ain't stop Trains at The Border that I know. Triple Dog Dare them to shut The Border down to Wheat/Barley, Just Try It, Yall ain't Hear Me, I said TRY IT!!!!!! Two kin Play This Game, God Forgives, I Don't!!!!!!!!

[jdepape]

chuckChuck
First you say there will be some huge onslaught
of wheat going south into the US - then you say
truckers willing to go there will be hard to find.
Which is it? Are we going to be trucking or aren't
we?

Arbitrage means competition drives prices.  If
someone needs it and is going to move it right
away, they'll pay more for it than someone setting
a nominal bid and expects to store anything they
buy (meaning higher costs and lower prices to
you).  Different prices but still arbitrage - including
opportunity costs.

You look at different prices at different locations
and suspect that they aren't arbitraging efficiently.  
But if the prices were all the same (after freight
spreads), there's no doubt in my mind that you'd
complain about collusion.  

BTW - the prices you showed were for 15% DNS
- not for 14% DNS.  No matter - quite a range, I
agree.  Suspect that the buyer at 9.51 needs it
more than the guy at 8.52.  In fact, the guy at
8.52 might have very little interest in it at the
moment because of limited space and a good
program of something else going on.  The 8.52
might be a signal saying "I don't want your 15%
DNS right now". Maybe he's buying all he needs
because farmers aren't bothering to shop around.

Who knows and who cares. It's your job as a
seller to avoid him and exploit the high priced
buyer. Arbitrage needs you too.

Think about this too.  Although I'm not sure if
you've ever argued this, I'm sure you've heard
the arguments that in an open market, farmers
will compete the price down.  So why is there
someone paying 9.51 when others are as much
as a buck a bushel lower?  Why are they sitting
there with such a big price? Don't they know they
don't need to pay so much and should lower their
price?  Why aren't farmers falling over
themselves - and each other - to sell at 9.51, so
much so that the buyer will eventually lower his
price?

Don't US farmers understand they're supposed to
push the price down?