Comments in Old Crop Barley PRO Commentary

[chaffmeister]

Charlie

Further to your point that the maltsters may bring in US malt barley - last week BNSF issued a tariff for barley from North Dakota to Winnipeg (where BN terminates) and only for furtherance, meaning it has to be picked up by CN or CP to take it to the end destination.

Just a point in terms of barley marketing (perhaps a little off topic of this thread but relevant nonetheless), today's price action in corn and barley futures shows us "in spades" how substitution takes care of low supplies. Cash barley (and futures) were moving higher as long as corn was moving higher too. The prospect of cheap corn sure can knock the barley market down a peg or two, can't it. The prospect of bringing in more barley more readily will also help keep the ol' bull from runnin'.

[TOM4CWB]

Chaffmeister,

The buy-back process requires CWB grain receipts (the sale to the pool) be cross checked with US sales (the grain receipt issued by the US grain co.), which are in turn cross referenced with the export license.

It would not be possible to do a false buy-back without a massive fraud scheme, involving the producer, CWB agent, and US grain buyer, US Customs and Canadian Customs. The paperwork is all cross referenced to the actual customs export documents with a truck going across the border with the export license and grain receipt paperwork.

On top US Agriculture Dept does spot checks, as do Canadian Customs, who take samples from time to time from the loads as they go through Canadian and US Customs.

My suggestion is that it would be more likely for Osama Bin Laden to walk through US Customs, in plain daylight, then be given permission to enter freely into the USA, than to do what you were just suggesting.

The paper industry must sure love the CWB...

[chaffmeister]

Thanks Tom: Hey, I don’t want you to think that I was “suggesting” this – I wouldn’t suggest anything that was fraudulent. It must be the grain trader in me – trained to always look for the opportunity, loophole, etc.

[charliep]

Maybe the point needs to be highlighted about the differences between moving feed barley north and south. Importing feed grain from the US is an easy process involving only normal sales documents (sellers name, buyers name, quantity, grade, etc) and a certificate indicating it is starlink free in the case of corn.

[TOM4CWB]

Charlie,

The $20-40/t still does not explain what is going on...

Since it costs about $1/bu US (1.57CDN) to ship out of Montana to the PNW port, and only half this amount to go through the Canadian rail system, then something is wrong or there would have been unit trains of barley coming back from Vancouver to Calgary, at $23/t.

None of this adds up. For the CWB could have shipped to GREAT FALLS and sold to a grain broker, and still would have been mega bucks ahead, because I do not believe that on average the Lethbridge/Great Falls spread was this large.

It is only $12/t max. difference in freight to go from Great Falls to Lethbridge, and if the PNW price was $45/t lower than Lethbridge, the barley would have gone to Lethbridge instead of for export...

Unless arbitage is stopped by red tape, (the CWB?) then these differences would never occur in a normally functioning market place.

Since buy-back feed barley is recorded in the 56000t pool number (which couldn't have been shipped to Japan) , exactly how much CWB feed barley did leave Vancouver BC for export? Screening pellets were worth more than what the CWB records show they received for this barley...

Something is not adding up here...

[charliep]

No disagreement. As chaffmeister, there are likely differences between shipments and receipts. You would also have to look at how inventory (if any) was valued between crop years.

In my comments about importing US grain, I should have included normal business documents at the border.

[chaffmeister]

The best the CGC has to offer:

Barley Exports up to the end of May (in thousands of tonnes):

Italy .2
South Africa 47.8
Tunisia 22.5
China 362.7
Japan 49.3
Korea 10.0
Columbia 41.3
Ecuador .1
Mexico 4.3
United States 349.9

total 888.1

feed exports of 56.0 means malt barley exports are about 832.0

Can't tell from the CGC report which is feed and which is malt. Obviously most are malt - most of the US figure is malt but I don't know how to disect it any further.

[parsley]

Keep this in mind. Tom4CWB applied for his license and it was denied so he had to "offer" his grain to the Board at which point they began to "market" the grain Tom4CWB sold to the Board. They can legally sell it to China or in this case, back to Tom4CWB at whatever price they think is "reasonable", because the word reasonable is constructed in the Act.

Once the grain is offered to the Board they can pretty much legally sell it for whatever. It's Board grain and they have an obligation to market that grain.
Tom4CWB, there is nothing illegal about them selling your grain back to youso that the Board loses $1.00/bushel or whatever.

Prices? The Board gets to chose. BUT denying you the license? NO.!!! The legislation does not allow them to deny farmers export licenses because you are tall, because you are rich, because you speak Portugese or because you live in Alberta.

Parsley

[parsley]

I wasn't clear about what I meant. I should have written, "denying you a license, with the excuse that the buyback is required by legislation".

Parsley