Information and Skill Development Needs in the New World

[charliep]

Just a quick question about what you and your neighbors information and skill development needs will be in the new year with the changes?

What I see happening to date/needs.

Meeting and workshops to help farmers understand the changes and implications. Will be a mixture of private sector and government. Already happening.

The release of new contracts by grain companies and the need for farmers to understand them including contractual commitments.

Price reporting and publication processes for new crop wheat, durum and barley (malt and feed) prices so farmers get a handle on fall 2012 values for budgeting and risk management purposes.

Processes for understanding the current and upcoming wheat futures contracts and the likely basis level that will evolve.

The likely role of the new CWB and the programs they will offer.

Other areas that farmers will need information on. Producers cars. Shipping grain to the US. Containers.

Just before Christmas but know I will be asking these questions in the new year.

[Cattleman]

Where is there information or plans regarding the details of new futures contracts for wheat, durum, feed wheat? Kind of fell behind on this one....

[bduke]

Charliep... You are getting way ahead of the pack!

The developments this morning still seem
somewhat surreal to me, having been under CWB
oppression for all of my farming career.

However, I don't think the changes forthcoming to
we who seek choices should cause much
consternation.

Most farmers have diversified their cropping choice
beyond wheat and barley.

Contracting oilseeds, oats, specialty crops and
domestic feed grains is now normal.

Price transparency should improve greatly for food
wheats and barleys.

Shipping to the US may become more expedient via
rail cars than my current method of finding
authorized trucks.

Producer cars may need industry requirements for
unloads, but unlikely because most grain
companies do well with their Terminals.

Regarding the few who are unfamiliar with crops
other than food wheat or food barley, the CWB will
apparently still be wanting their business.

I do believe farmers should become much more
conscientious and demanding regarding the
contracts we sign.

I also think contracting specific characteristic crops
will become more prevalent, even beyond the US
malt barley practices.

My biggest regret is that this change is 40 years too
late for our farm.

My worn out old soul is battle scarred and cynical
from this illogical, fundamental rights battle.

However ,today I rejoice that I have lived and
farmed long enough to realize the possible can
happen.

Cheers to all.... Bill

[charliep]

ICE has posted their contract specifications. The contracts themselves start trading January 23. Basics will be similar to the canola contract. Feed barley (note your handle) will move back to Saskatoon area from Lethbridge. Nothing specific for feed wheat although likely to trade off feed barley.

[URL="https://www.theice.com/productguide/ProductGroupHierarchy.shtml?groupDetail=&group.gro upId=8"]ICE wheat contract specifications[/URL]

MGEX are actively talking about their contracts as well and hoping to generate interest. The CWB has been an active user of MGEX as well as KCBT.

[TOM4CWB]

ICE Futures Canada offers futures and options for Canadian grains and oilseeds that recognize Canada's central role in the global agricultural marketplace.

Introducing Canadian Milling Wheat, Durum Wheat and Barley Contracts.

Launch date January 23, 2012. Learn more.

Open and transparent trading after a decades-long marketing monopoly by the Canadian Wheat Board Learn more.

Delivery FOB registered elevators in the main producing areas. This proven concept mitigates logistics-influenced market anomalies to help ensure a strong relationship between the futures and the underlying physical market.

Priced in Canadian dollars

Milling Wheat and Durum Wheat contract size is 100 tonnes

Barley contract size is 20 tonnes

Contract months March, May, July, October and December (Oct 2012 will be the first month listed)

Trading hours (electronic trading only): 7:00pm CT to 1:15pm CT the next day

https://www.theice.com/productguide/ProductGroupHierarchy.shtml?groupDetail=&group.gro upId=8

[cottonpicken]

Charlie or anyone,in the case of malt barley and
durum are we not walking into a huge new
paradigm with the paper trade?

I see the initial days after jan 23 as being something
guys should be trying to wrap their heads around.

The spring wheat will have to hit equilibrium with
the other exchanges so i'm not to interested in it.

Will the specs pile into the options anticipating a
flood of contracts from producers and then pull the
rug?

Will they see this as the buy of a lifetime and buy
everything up?

Or is the trade so thin most specs wont bother with
these markets,so basic supply/demand analyst
takes president?

Haven't seen anyone touch on this,although i
haven't read every thread.

[bduke]

Cottonpicken... your perspective and questions are valid.

IMHO only time will confirm whether or not these contracts will
garner enough activity to build momentum.

Speculation is necessary for liquidity, and without liquidity few
specs will trade.

However, Canada is being increasingly recognized by foreign
funds as a safer place to park money, to invest in commodities,
and to diversify their portfolios.

Hopefully these new contracts will be successful. Durum, for
example, can not have a poorer pricing mechanism than is
currently employed.

Delivery to the US will be a great benefit to convergence,
without an Ice contract.

Also, the volumes of durum and barley are much greater than
flax, which didn't trade enough to work.

The propensity of farmers and the trade to manage their risk
will be the early indicators of the viability of the Ice's venture.

Hard red wheats will likely track Minnie, as canola tends to track
soybeans.

Of course, if the CWB polling is as accurate as they contend,
most wheat, including durum,and barley will be marketed via
their programs and discretions.

Time will tell.

Just my thoughts... Cheers... Bill

[cottonpicken]

Dont ****in tell me they are "valid".

[TOM4CWB]

Cotton,

It may in fact be a blessing in disguise that the crazy 8 made such a big deal of our marketing change.

This has been watched and carefully step by step anticipated...

Couldn't be better for the launch of new future contracts.

Viterra won huge today in market share. They were ready... and got massive market share for next fall in wheat.

Often the early bird does get the worm! Viterra certainly did out bid the CWB for summer of 2012 wheat... there is no doubt about this.

[charliep]

Getting enough volumes initially will be a challenge to all 3 contracts. I note that western barley futures has been basically inactive for several years in sspite of the fact western Canada consumes 7 million tonnes as feed annually.

There is no durum futures market - the opportunity is to be like canola and be the international reference price/hedging tool.

One of the things I will look for in the new world will be a more visible cash market with reported prices available to all buyers and sellers. The two go hand in hand with caveat of the chicken and egg dilema - which one came first.

[TOM4CWB]

Dear Charlie,

I see the competitive market on milling wheat has a basis half of what the CWB is charging now.

Any reasons why the CWB continues to charge such an outrageous amount?

Is this all about padding the Contingency Fund... while the monopoly remains?