Good News and Bad News

[charliep]

I have good news and bad news.

Good news first. CWB fixed price contract basis levels are likely to strenghthen over the next few days.

Bad news. Todays USDA report put a more negative spin in wheat futures today. Suspect a lot of this negative news has been included in basis but futures are waking up to reality.

[URL="http://www.usda.gov/oce/commodity/wasde/latest.pdf"]October[/URL]

[boarderbloke]

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dointhedrt
Posted 10/12/2011 09:24 (#2000698)
Subject: Minneapolis Wheat




Edgeley, ND I had been ignoring the wheat market for a couple weeks and when I looked at all the local elevators yesterday I had to do a double take. There had to be a mistake. So I called an elevator manager and he explained the market is trading off Mar instead of Dec for a deep discount. He claimed there is supposed to be an investigation into the rules but who knows

What's going on here?

[charliep]

Not sure.

From Informa Economics last week.

Minneapolis Dec-Mar Spread in Rare Territory. The December-March spread in Minneapolis futures has been inverted since early September. The spread gradually widened to about 8 cents during the first three weeks of September, then began to widen at an accelerated pace, with only a brief interruption early this week, closing at 80 cents per bushel, premium December today. Commercials switched their domestic HRS cash basis pricing from the Minneapolis December futures to the March contract late last week, so new hedge activity related to grower sales should no longer be much of a factor in the December contract. As shown in the scatter charts that follow, Informa’s supply/demand outlook suggests that the current December-March spread has moved well beyond fundamental value and may be
difficult to sustain into the December delivery period.

[dalek]

Happiness is........... 160 bushels of $7.10 corn.

[charliep]

Just curious is the $7.10/bu is current cash or a locked in price from this spring/summer? What is your corn basis normally in Ontario?

[TOM4CWB]

Dear Charlie,

DId someone get caught in the Minni-market AGAIN???

[NickJ]

Charlie the local ethanol plant is desparate for corn
right now so we're getting 80 for a basis. Basis to
book ahead for late October-November is -35.
Apparently only a handful of us are watching the
local markets because everyone else is waiting for
the corn to dry down a bit in 2-3 weeks instead of
paying a bit more drying to gain $1/bushel now. I
really don't think anyone else knows any more
about the price than what DTN is giving them from
Chicago.

Trying to ship as much as possible now at a cash
price like that and hold on to my contracts for later
(have a few in the same neighbourhood)

[burnt]

Not sure about over dalek's part of the province but the opportunity to price at those levels is long gone here in western Ontario. We are currently at a - 35 cent basis for delivery now. I lucked out and got a fair chunk priced back in August at $280 and $285/tonne ($7.20)FOB the farm for Oct/Nov. pickup.

You know the saying - "Shoulda done more . . ." but then I'd look greedy!

Only mistake I made this spring was unhooking the plow as soon as I did. Coulda bought hay for the cows this summer for less than it cost to grow it again.

[MoeAgostino]

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