whoops dec wht. contract no basis

[sawfly]

charlie while i do have some good HRSW fpc contracts
i have some with no basis.
apparently not all CWB thing but US as well.
apparently my marketing skills need a 10,000%
improvement, to survive the new world.
what are your thoughts on the dec. /mar. spread and the dec. basis.
what is going on?

[vvalk]

fairly certain that the US does not have a -$57 basis. remember that the US price is at the pit so add another -$55 deduction onto the futures price.

[charliep]

Not sure why the wide spread either. I suspect the spread will narrow over the next month but the advice is coming from the same person who thought $40 ish under was as wide/weak as the basis would get.

The issue in world markets is the return of non traditonal exporters (Russia in particular) and larger world wheat supplies has put lots of preasure on international prices.

Won't beat on another thread topic but perhaps why adding value in western Canada is so important.

To your question, I think patience is in order in pulling the trigger on your basis but need to be carefull. As a general rule, I hate rolling contracts but needs to be watched over the next month. Which brings on the original question - will the spread narreow to which I still think yes but will mumble a lot after that.

Others thoughts?

To your comment vvalk - yes, there has been and continues to be a wide spread between Alberta and Montana wheat prices. Both are very similar in terms of distance from major North American milling markets distance from port.

[groundspeed]

Will be more demand for cps type wheats. Probably more ethenol plants in the future.

[Hopperbin]

How about a new house for myself. Maybe a 5th wheel trailer sorry if imported. Instead of paying 240 grand for them new combines what could we do with the extra cash. Wheat as a cash crop, even export cps, what the hell??

[bucket]

As the re balancing of acres takes place over the next few months, it will be interesting to see how farmers react.

For guys that have shortened their pulse rotation it allows them to shift acres that others will have to pick up.

Actually, what crop will not be bidding for acres next year??

Canola needs to maintain acres,as does peas lentils. Chickpeas need more acres. But what happens if spring wheat or durum come out with an off the combine price with full delivery and full payment? How do grain companies get the other grain that farmers have been selling for cash flow??

[Fransisco]

I'm thinking a malting plant.

[rockpile]

Possibly more grain bins. If legislation isn't introduced
soon (and spells everything out clearly) and if industry
doesn't get it's ducks in a row, 2012 could turn into a
real shit show. And then there's the potential for the
court challenges. As far as value added goes, I'm in
Cott's corner, there is more to it than good intentions.
That's why Alberta is hopeful the Keystone XL pipeline
gets built to transport raw bitumen to Texas for
refining. Refined product from here isn't sufficiently
profitable to trigger the necessary investment.

[Fransisco]

Lets not forget this is not just about value added. There are going to be all sorts of export opportunities that never existed before as well.

What the wheat board has been doing can be called "demand management". Not unlike supply management but in reverse. Letting a little bit of demand trickle through here and there.

Once the single desk is out of the way demand will finally get to flow in unrestricted. We're going to see board grains going in all sorts of different directions that they've never been allowed to go before.

[farmaholic]

I wouldn't get too excited yet Boys. Personally I don't think all the stars are going to line up quick enough for the August 2012 deadline. There are going to be all kinds of roadblocks (opposition tactics, senate, legal challenges, etc.) I think if they are going to do it, do it right. They have 5 years(not that anyone wants to wait even 1 day more) Just opening the flood gates could create a shit show. I don't think the transition will be as smooth or easy as hoped.

[mustardman]

I also predict More Grain Bins being built.
Because if we 'take the price' off the Combine, Sorry, 'MARKET 'off the combine we will be 'Marketing' at the lowest price of the year, so I will build More bins till the time is right to 'price take' OH Sorry I forgot again 'to Market'

[Fransisco]

Yes and you may have to actually phone up your local elevators every once and awhile to check up on prices, you poor thing. How ever will you cope? LoL!

[bucket]

Mustard

I sold some canola off the combine for 12 bucks a bushel and delivered the contract in full and got paid in full as well.

Sold some flax for between 13.50 and 14.00 off the combine and got paid in full.

Maybe these are not the highs for those particular commodities but they are some of the best off the combine prices I have seen for them. And there is still some in the bins.

How's the cwb working. 25 percent delivery and 40 percent of your money.

BTW, it looks like the cwb is short again. How is the cwb going to explain the discretionary trading losses this time????

[TOM4CWB]

Mustardman,

I find it amusing that I am allowed and encouraged to deliver my Canola to meet our family and farms cash flow needs... as we need... IN the fall if that is our plan.

We plan a year ahead... as do our grain marketers/handlers/processors of Canola... and presto with a reasonable basis deliver our Canola IN THE FALL.

None of this negative $55 CWB BASIS antics... from the 'single desk' organisation that claimed they were fair and did not rip off growers since they had a 'monopoly'.

WOW... the CWB leaders do not walk the walk... the CWB talks and talks... while skinning growers; and doing the opposite of what the CWB claims they are and say; that they stand for.

What a joyous day it will be for so many... when the monopoly is broken.

For me personally... it is sooo bitter sweet... because if the tools the CWB has -now- were properly managed... there was ABSOLUTELY no need to even change the CWB Act as it is this very day.

CWB Chairman Oberg continues to provide arrogant deceptive leadership... tearing apart an excelent team and recking decades of hard work and good will.

The seeds OBERG and his crew have planted ... are about to be harvested.

What has grown out of their work and council (Oberg and friends at the CWB)are bitter and weak fruits...

That appear to badly serve the very grain growers they claim to be doing this manipulation, intimidation, and deception... job for.

WHAT a truly disappointing mess.

[furrowtickler]

Mustard com on, how many producers just dump canola, peas, lebtils, exc off the combine that is not priced two to six months earlier? yep, we are all going to sell HRSW off the combine at the same time and chase the price down lol. I see less bin space needed.