How do I make the most money on my wheat?

[buzz]

I am still trying to get my head around selling my 2012 wheat crop. I am reading that unless we have some global production reductions there will be lots of wheat therefore likely lower wheat futures in September 2012 than now. How would you guys play this if you think the price is higher now and don't want to gamble all of the crop on the price I might get next fall?

[bucket]

If you know the grade of the wheat or durum in your bin, cancel your contract with the cwb, and make an August delivery with your grain elevator. You will have your money quicker than waiting for the final in december 2012.

Then as your crop for 2012 comes in make the adjustments as required for selling.

Let's say you end up with a good crop and because of logistics at the elevator they haven't brought your grain in. Then you have two years supply to sell as you please.

You may be able to see value from the cwb if it comes up with defferred sales contracts that pay storage.

In my view that is where the cwb could find a niche. They have the contacts and the knowledge to know when certain customers want grain. The cwb could use that to their advantage in price and delivery. And farmers could miss some of the frustration that may come up this August, with lineups and poor performance of the grain companies.

[Burbert]

Yup, quik money is always better, than
MORE money, whicha have ta pay taxies on
anyway. Grabbb the money and run, f&**k
everting else. Marketeering is the
future, no more snivellin and
whinnning......

[Braveheart]

Buzz, there is no easy answer to your question. To start with, crop sold in fall of 2012 will be priced off of the MGEX Dec 2012 contract. So, that's the one to watch.

The problem with pricing new crop for me is I find the basis is too wide. We're at $1.22 under MGEX Dec 2012. I think that's too wide but, I admit I'm a long way from knowing what a reasonable basis is.

We're going to be a little patient. The weather is really different. I believe there is time for lots of price action. We forward price to take the risk out of the crop price going lower. I don't see that risk there right now.

[ajl]

While I am grateful for the marketing
change that is coming, you still will make
money on your farm the old fashioned way.
Growing and selling canola. The world
does not need Canadian wheat with the
expansion of production in the Black Sea
region.

[ado089]

Alot of the line companies are at $7/bu
for fall delivery. That's already better
then what you're getting from the
beloved board.

As for the basis question...high protein
wheat can be as high as $2/bu over MGEX
FOB Minni. There is somewhere between
$60-80/mt of freight (rail) to get it
there. For high protein wheat I would
expect a near $0 basis FOB Saskatoon,
probably -$36 for low protein.

[Burbert]

Clean it, put it in a pot, add some water,
boil it fer a long time. Get a bowl, put
wheat in it, add some brown sugar, and eat
it.......

[TOM4CWB]

Here is info from the Red River Farm Network; www.rrfn.com.
A Weekly Update From Your Friends at the Red River Farm Network
Monday, January 9, 2012

"Wheat Outlook — Even with a large global supply of wheat, North Dakota Wheat Commission marketing specialist Erica Olson says there is not much high quality wheat. Wheat must compete for acres, but Olson expects spring wheat and durum prices to be competitive. “Our customers need wheat and they’re trying to pull it out of producers’ hands, and I think the market’s aware that we’re going to have to bid for acres in the spring; so far, the market’s been able to hang in there.” Olson presented the wheat and durum outlook during the Lake Region Extension Roundup."

Ask Questions — While contracting crop production has been done for years, North Dakota State University Extension marketing specialist Frayne Olson says it has become a moving target with the volatility in the futures market. Olson says understanding your contract is vitally important, and if you don’t understand a clause in the contract, ask. “One of the best sources of information is the company that you’re contracting with because they want this to be a good experience so you'll come back and continue to contract with them."

Cheers!

[buzz]

Thanks for the ideas. I enjoy reading how you
guys are thinking. Lots to learn.