CWB Wheat Prices?

[TOM4CWB]

Thalpenny,

On Agriweek Aug. 19/02 edition, the CWB offering price Latest Quote was;

Export Price $253.72/t #1CWRS 13.5 St. Lawrence/Vancouver

Last week;

Export Price $275.36/t #1CWRS 13.5 St. Lawrence/Vancouver

Now when I checked the Portland price this week, it has increased from $270/tCDN last week, to $276/tCDN this week.

What has happened?

Did the CWB drop its weekly offering price by about $22/t while the US increased its cash price by about $6/t?

Why doesn't the CWB web site have accurate CWB offering prices for cash wheat, so we can track CWB selling?

[AdamSmith]

Here are the facts on what wheat prices have done since the beginning of the rally in late May 2002.

Minnie wheat has rallied from a May 22 low of Cdn.$ 4.78 to a high of Cdn.$ 6.58 on Aug 14, that’s a Cdn$ 1.81 bu. rally or a 38% increase in price. The Minnie contact is a #2 contract remember. #1 carries a premium.

The CWB June #1 13.5 Vancouver PRO was 201t or $5.47/bu the latest mid month PRO was $242t or $6.59/bu. a $40 or $1.12bu increase or a 20% increase. #2 is $6t less. A #2 in MB is a #1 in ND.

In Canada CPS Red and Red Winter Wheat re discounted by $26t and $29t or $.71/bu and $.79/bu respectively. The hard red winter discount in both Minneapolis cash and Portland cash is approx. $.12 US$ or $.19 Cdn.

Bottineau ND Aug. 16 DNS 14% $5.53 Cdn.
Killarney MB #2 13.5% delivered $5.11(based on the assumption that the PRO is believable and valid)

Also we need to factor in that about $4 or $5 t interest earnings will be built into that PRO # so the CWB actual selling value would be around $4.97/bu.

Now here is the commentary.

These #’s are published numbers that are real and valid. They are irrefutable. They are the equivalent of a blue sky and the sun rising in the east and setting in the west. Yet the CWB information and propaganda dept. will dismiss these numbers and cite some ridiculous academic exercise that was conducted deep in the bowels of the University of Marxism in Saskatoon as the evidence that the things we can see, touch, taste and hear are not real at all, but a number that is concocted out of thin air is real. In essence the CWB is saying the sky is not blue but green and the sun, as everyone knows, rises in the west and sets in the east.

I challenge anyone, anyone at all, to show me the real evidence that the single desk system puts more money into my pocket over a free market system. If someone has evidence that $5.11 is greater than $5.53. I want to see it. I’ve been hearing of green skies and I want to see it with my own eyes. If someone has evidence where I’m better off with $.75/bu discounts for my CPS and CWRW than I am with $.19/bu. I want to see it. I’ve been hearing about this western sunrise and eastern sunset for years now and I want to see it.

SHOW ME THE MONEY

[TOM4CWB]

Thalpenny,

I see $4.00/bu US quoted in this article;

"Aug 16, 2002 (Grand Forks Herald - Knight Ridder/Tribune Business News via COMTEX) -- Area farmers who have a crop to harvest can cash in on some of the highest grain prices in years.

Wheat and soybeans prices at elevators in northeast North Dakota and northwest Minnesota are averaging more than $1 per bushel than a year ago, according to a Grand Forks Herald survey of elevators. Corn prices, meanwhile, are more than 50 cents per bushel higher than last year, according to the survey.

While this year's grain prices aren't near record levels, they're better than they've been the past few years.

"They're getting back up above the cost of production, which they haven't been at in several years," said Willie Huot, Grand Forks County extension agent, noting that, on average, area farmers' per bushel cost of wheat production is $3.50 to $3.60.

Although the prices aren't exceptional, they will lessen farmers' dependence on the government, Huot said.

"I think the good part is that there is more revenue coming in from the elevators," Huot said. As long as cash prices remain higher than target prices set in the 2002 Farm Bill, farmers will be getting their payments from the marketplace, rather than from government subsidies, he explained.

The frustration for some area farmers, of course, is that drowned-out, heat stress and other crop problems have reduced yields.

"The bottom line is that you have to have bushels in order to capture this. If you don't have bushels, these prices aren't doing farmers any good," Huot said.

Best crop in U.S. But in general, northeast North Dakota and northwest Minnesota farmers have some of the best crops in the United States, said Ray Grabanski, president of Progressive Ag, a Fargo-based brokerage firm.

"We have a crop that is virtually a disaster nationwide. The garden part of the country is eastern North Dakota and northwest Minnesota. We've had our isolated areas of flooding, but we've got the best crop in the country," Grabanski said.

That means that area farmers should be able to take advantage of grain prices that could climb even higher.

"I certainly think, in the case of corn and wheat, you have a chance to price in the top half of the historic price range," Grabanski said.

Farmers already have the opportunity to price wheat at $4 per bushel " the highest level in six years " at some North Dakota and Minnesota elevators, he said.

And a short supply of grain, coupled with a poor crop production year nationwide, could push prices higher, Grabanski said. Progressive Ag models show the national average yields of corn and soybeans both will be down 10 percent this year, while wheat yields will be down 8 percent.

In the world of grain markets, that equals a huge drop in production, Grabanski said.

"That is considered a disaster." It's a disaster that could drive up prices.

"Just a small change in production causes a big change in price, basically, because it is food," Grabanski said.

For example, according to Progressive Ag models, a 1-bushel change in soybean yields results in as much as a 60-cent swing in the marketplace; a 1-bushel change in wheat yields, a 17-cent swing; and a 1-bushel change in corn yields, a 4-cent swing.

That means the market will continue to be extremely volatile through the harvest. Although, Progressive Ag so far is estimating a 10 percent drop in corn and soybeans production, that number could change " and prices could fall " if the weather in the Corn Belt improves during the next month, Grabanski said.

In the meantime, farmers should consider pricing a percentage of their crops, suggests Huot.

Farmers cautious So far, farmers in northeast North Dakota and northwest Minnesota have been cautious about forward pricing because they barely started harvesting, elevator managers say.

"We're not even 5 percent done" with the wheat harvest, said Mike Morgan, manager of Thompson (N.D.) Farmers Co-op Elevator Co.

"I think the farmers are excited about the prices going up, but they want to see what they get for yields." With harvest just under way, no one has a handle on the quality and quantity of this year's wheat production, he said.

"Quality is kind of up in the air. I've heard yields from 10 bushels to 60 bushels."

To see more of the Grand Forks Herald, or to subscribe to the newspaper, go to
http://www.grandforks.com."

Now I have heard may times that we are told better prices are a myth...

Why are our Canadian prices lower than just across the line... when the CWB claims we have a premium product and we are dependable suppliers...

If I take $4.00US wheat and put it through Canadian handling advantages, we should be seeing $6.50CDN for what the CWB claims to be lower quality wheat...

Yet you are telling us our small crop is worth only $5.45CDN...

Please tell me where the approx. $1.00/bu disappered to AGAIN???

Do we farmers who are getting 5-25bu/ac this not deserve the higher prices... as much as the US farmer who receives how much more subsidies you say than we get...????

How can the CWB explain what happens...

When prices were bad last fall, the CWB was selling our short drought reduced prices at much less than world prices... "Grain Matters" Jan 02 CWB information...

Now prices have increased, the CWB still is selling way below the "premium prices" as you promise your monopoly objective is set up to extract...

How do farmers reconcile the difference between the performance you say you achieve, and what we actually get paid by you...

Thalpenny, can't you see we have a big problem of credibility here???

[TOM4CWB]

Tom4cwb, as you know, you are comparing spot prices to an estimate of pool returns over a 12-15 month marketing period. This estimate doesn't reflect only the US market, but all markets.

So the questio here is - can you tell me if prices are going to continue to rise or will they subside over the next 12 months?

Another factor is that we don't know the grade patterns yet. All the returns in the wheat pool account are accumulated, adn the final return for each grade is determined by establishing what the price relationship was over the whole year.

If this was not done, the following scenario could easily unfold: if a lower quality wheat was sold at a peak price period, say #3CWRS at $235/t. And a while later in the pool year, the market relaxes a bit, and a sale of #1CWRS happens to be made at $230/t. What price should be reflected back to producers??

As we have seen in August with the mid-month update, the PRO is an estimate and takes into account changing market conditions. It cannot directly reflect sales contract values on a spot or daily basis because it reflects firm and estimated returns over the whole pool period.

There's nothing stopping you from going long some put options if you feel the market has peaked. Or going long calls if you think there is upside potential.

Tom

[TOM4CWB]

Thalpenny,

I really am not interested in what the price will be in 15months.

What I am interested in is what price, after I have determined the quality and quantity of my wheat, it is worth so I can stop taking risk and get paid to pay my bills.

OWPMB allow a minimum price payment, within $10/t of cash value, flat pricing, as well as pool pricing for those who want to speculate on a pooling account.

And Thalpenny if I made a contract to sell 1Canada Canola for $350/t, and my neighbour sells 3Canada Canola after sitting on it for 5months for $400/t, I am not offended one little bit. This is the way the market works cause that neighbour could be selling it for $280/t as well.

THE CWB idea that you are able to make things "fair" is a myth, and has no basis in reality for those who must deal with you, the CWB.

Life and the situation we as farmers means situations will never be "fair" in the communist sense of the world.

Better sales people will on certain days be able to get more for an item than other salespeople who aren't as polished or informed.

I am simply needing the right to be responsible for myself, and make my own decisions either good or bad.

Is this unreasonable, or is the CWB willing to pay part of my expences if you, the CWB do a poor job of selling?

If you are willing to become responsible for my expenses, then we can talk, but if not, why do you feel it is your right to decide whether or not I have a good year or bad year financially?

Shouldn't that be my responsibility?

[AdamSmith]

thalpenny you ask what price should be reflected back to producers. That's easy. The real price. The CWB's ridgid price spead structure is not helping farmers one bit. The CWB is sending the wrong signals 75% of time.

We're starting to combine barley here and no one other than the compleatly naive even wonder about malt.

One farmer I talked to sent a sample away for a vomi test and it came back zero vomi. But getting malt has litterly lost all it's luster.

ND malting barley bids are running at $.70/bu $cdn to $.95/cdn premium to feed. Based on Robust.

When feed bids in Canada are running higher than the malting price (kinda price/outlook/wishfull thinking/hope so maybe price)

That's blue sky baby.

When am I going to see the green skies.

Anyone out there ever actually seen the CWB's green sky?

Have you parsley? Have you Tom4CWB? What about chaffmeister or Kasro? Have you ever seen green skies?

[TOM4CWB]

AdamSmith,

I have seen the green sky...

It is a sky that is created by stealing from ourselves and our neighbours, stealing to make sure none of us can make our own decisions or be responsible for our selves.

THIS way we will always have a good excuse to go howling to Ottawa, and by working for the green sky we will all be equally bankrupt of accountablility for our own destiny, as well as the destiny of our children.

THE green sky is clearly a sad reflection of myths and theories the rest of the is honest enough to admit are untrue and unproductive and dishonourable.

THE Green Sky... it tares the heart and soul from people... it's built upon getting something for nothing... greed... the power to steal from my neighbour without permission...

only in Canada you say...

[parsley]

Green skies? Never. I used to see blue skies, but now l only see muddy skies, AdamSmith.

The Directors are dipping into the grain pallettes and stirring, and we get a muddy mess, but of course they keep careful track of the numbers ....some goes in, some goes out, some is stored, some is donated, some is put in funds....but it all adds up to the "right" number so the auditor is happy, the directors preen and the Staff brag about how it is so simple to add. And farmers are told it is none of their business.

But farmers live with muddy skies. We'll never see green skies with the likes of Directors like Michael Halyk who swear up and down that taking money out the pooling accounts to make muddy skies is a good idea.

Parsley