Will Prices For Wheat & Barley Go Up on Aug 1st?

[ASRG]

Rumors are going around that some grain dealers are talking about $5/bu for #1 feed barley on Aug 1, 2012. I have not heard any numbers on wheat.
I have some barley and will probably hold it until Aug 1, but my main reason for asking is this:
I help some of the neighbors negotiate surface leases and annual rental reviews. The company landmen try to establish a pattern of dealing which basically sets a price for adverse affect and loss of use. This is generally a good basis to start at, or acceptable for farmers who don't want to push the envelope.
The "pattern" in my area is $2200/lease for adverse affect and $450/acre for loss of use. I have suggested to one landman the "pattern" loss of use needs to go up? The "pattern loss of use was based on $4/bu barley and $11/bu canola and has been in effect for well over a year.
Recently a friend of mine negotiated a surface lease renewal of $2800 adverse affect and $585/ac loss of use...but this was a different company and he had very extensive detailed records.
Right now I am helping an older neighbor and I'm suggesting to the landman $2600 advers affect and $525/acre......so far he's not biting! We might need to hold off until there is some kind of indication the loss of the CWB monopoly will actually mean higher prices for barley and wheat? Will we see actual contracts once the bill is out of the senate and given royal consent?

[charliep]

I think the feed barley and canola prices are about spot on (best information
today). You didn't indicate the level for wheat but the forecasting stuff I been
involved in recently for 2012/13 would have prices down 5 to 10 % from current
levels. Not based on changes to the CWB but rather the world market/increased
market share by the new exporters. World crop fundamentals will have more to
do with prices than what goes on here at home in terms of single desk. That's
your risk (with risk being defined in terms of both pain and gain).

Any other early prognostications for 2012/13?

[charliep]

On your question on contracts, most grain companies are ready to launch
on the final passing of the bill. As preliminary thinking, I would be
looking at the old/new crop inverses on spring wheat. KCBT actually has
carry out into new crop.

[Tom4Wildrose]

ASRG,

Farmlink gave a good presentation on Friday in Westlock AB.

A simular question was asked.

His answer was simple: Wheat and Barley prices will go up and down... Cwb 'single desk' or not.

World grain prices were NOT determined by the CWB... they were as much a price taker as anyone else... as hundreds of PRO announcements would prove over the past decades.

Volitility is another matter. The CWB pool system... and PPO cash prices being created out of these pools... especially on wheat... reduced volitility.

Prices always go up and down... that will NOT change!

If you can predict ethanol policy on grain consumption... that would be a much better yardstick to measure where grain prices will go... with the value of Oil the base of that complex.

Will we go to war with IRAN?

Will middle eastern oil flow unrestricted?

Will the EU resolve its debt crisis?

These problems will affect grain prices 100 fold more than the end of the 'single buying desk' and its affect on western Canadian domestic prices!

[wd9]

You will probably, like all the other grains, get market value for wheat and barley. Unlike today where the formula is:

Sell 1/12 of the crop regardless of price (which all the buyers know and pay accordingly) minus the cost of 500 well paid and extremely well benefit planned enabled employees and a very expensive BOD and all their crazy financial "plans", minus loss of opportunity costs of getting all your money 15 months later.

[GreenValley]

Southern Manitoba bid 5.20 for barley delivery Jan/Feb. Southern Ab bid 4.70 to 4.75 for delivery same month.
Only .45 cent difference more at southern Man, wtf because of flood?

I got letter of company Annual Compensation Review back in Jan 2011 and sign letter and amend the letter I propose little change and send it.
Havn't heard till Oct 14 2011, so I email to company regards if they got my letter, and said no they havn't got letter, wtf. So I email with my re-copy letter. Currently, loss of use $250/ac
and adverse effect of which is $1600/ac. So I propose amend the letter saying request raise loss of use to 350/ac and 2208/ac for Adverse Effect.
Where you get $450 for loss of use, it seem quite high? Our lease use for hayland and can be change to crop if want. Adverse Effect just about close as yours which is reason I want to raise. Usually company standard for pasture/hayland is 250/ac, but it is too low don't you think.
Instead response of my re-copy letter, they will send landman instead, hopefully before Christmas.

[cottonpicken]

Best thing that is happening is durum being paper
traded.

[bucket]

cotton

Question. Why did the durum contract not work in the states?

Just asking. Never understod why it couldn't work as their is a fair amount of durum traded globally.

[malleefarmer]

Dont count your chickens before they hatch.
First thing you will notice with open market after a while is higher highs and lower lows, main thing is you have opportunity all the time between the two ends of the pricing range.

Its time for you guys to stop gloating and actually work towards a new role for cwb cotton came up with someting brilliant now try to put framework in place to make it or something else happen.

[ASRG]

Greenvalley: This is the pattern for this (my) area (deep black soil). $450 for crop land. They try to say pasture is $350 but anyone in the know says okay I'll break that land....and that is the end of that story!
We do have a fairly reasonable expectation on crop yields? A fairly predictable yield (within weather events....which are not extreme in this area) and hopefully a fairly predictable five year price( I know that is a problem)?
I'm not sure just what the situation is in Manitoba, in regards to your regulatory framework, but in Alberta the threat to take the case to the Surface Rights Board, is usually enough to get the landman "a bit more focussed"?....it's going to cost them some significant money to go to the SRB......and usually, suddenly their pencil gets a bit sharper!

[parsley]

Mallee and cott. There is a psychological inertia ,
I find, as well as the usual reluctance to do
legwork

The CFFJ was a core of dedicated doers. The
bull of farmers though, waited to see what would
happen so they didn't have to put themselves on
the line. Same now.

Organic will continue to market. But difereve id
won't have a buyback. If you need some grunt
work done, i could dedicate a liittle time for
commercial grain. The venture is huge, but
dwarfed by potential returns Pars

[cottonpicken]

Pars is right,you need critical mass and momentum to
start something,like those snowballs that form
themselves once in a while in fields,perfect
wind,moisture temperature.

Nothing we are capable of.

[GreenValley]

ASRG, 350/ac on pasture with black soil
on ur area sound good. My farm is just
west of Rimbey, Alberta and soil range
is grey to light black. Currently lease
is hayland but can work up and seed back
to pure alfalfa hayland. Figure at
present market and include 2nd cut would
come close to 435/ac which is better
than pastureland (250/ac). With cattle
price is rising and pretty hard to
figure the math on what idea of current
price would be than same old standard
250 which is hate going to SRB and I
dislike that company. I know they want
show me paper work. Cropland here around
350/ac and easy to figure but not
cattle.

[ColevilleH2S]

Just a fyi GreenValley;
The main company I have to deal with pays $1900 inconvenience and $500/ac losses per lease. The other company pays less for inconvenience, but more per acre (can't remember the figures off the top of my head). But they work out pretty close to each other in the end. This is Brown soil zone cropland in WC Saskatchewan.

[hobbyfrmr]

Cotton, I cannot believe you just said "Nothing we are capable of. " Bill C-18 is LIFE CHANGING for generations to come. I wanted to try to be a grain exporter. For 2 years, I sold a million dollars a year of feed grains into the US and got paid for all of it. I have a cell phone and a fax machine. I check emails in the morning and at night. I am just a 3 dressed up as a 4. But you are fully and completely WRONG when you say that personal marketing is "Nothing we are capable of. " You can save that kind of talk for the coffee shop where you live. There may be a couple of folks who still thrive on negative reinforcement. Or else I completely missed the sarcasm.