zero basis

[bucket]

Can someone explain what a zero basis means on spring wheat?

I can't figure it.

[SASKFARMER3]

Well by doing proper marketing I will give 20000 to Cargill for letting me deliver wheat off the combine. Just a cost of doing business with Cargill.
Ah isn't Canada a fun place to farm. You have to book space in fall so sign up early so you can deliver because were only doing so much grain this fall off the combine. Hook line and sinker.
They got me.
Now zero basis is still bull shit. $5.40 min wheat is $6.00 Canadian. They aren't paying shit all for protein. Basically were getting it up the Ass again. But like some on here say quit bitching and take it.
Ah God bless Canada.

[mbdog]

there used to be a textbook definition of it...still applies albeit with more "market" influences factored in. Honestly don't have a friggin clue what a "good" basis is anymore. Already feel like a dork at -25

[bucket]

The experts say the foreign exchange is in the basis. Well a zero basis has nothing accounted for.

Mpls price in usd with zero basis somehow equals mpls price in cdn dollars.

Criminal? Apparently not.

Misleading? A little.

anyone care? Apparently not.

[mbdog]

its not misleading or criminal. It is what it is. Its going the right direction given the Canadian circumstances. Don't like the fact that futures aren't responding to an obvious fundamental issue, but that's marketing.

[SASKFARMER3]

Really tough when futures are based on Feed wheat prices. Yes the world is awash in Shit wheat. So price has dropped. dropped and dropped.
Futures know.

[bucket]

Since it's OK that graincos in Canada pay you in Canadian dollars but use US futures with no exchange?

OK then I guess all farmers should accept it.

Can't use cdn dollars at par in the states not sure why graincos can.

[mcfarms]

funny though I offered to buy fertilizer using the same process and they declined.

[bucket]

Funnier yet. Canadian made fertilizer that never gets exported is priced out of new Orleans.

Please pass the KY.

[charliep]

I don't know how many of you follow Montana prices. Relevant for Alberta. S.E. Saskatchewan and Manitoba will have your own N. Dakota references. Here is the Montana Wheat and Barley Committee Link.

[URL="http://wbc.agr.mt.gov/wbc/Producers/Pricing.html"]Montana wheat prices[/URL]

I am going to give you a link to a Great Falls basis. Wheat basis variability is very large even in the US. When I read these posts, I wonder what farmers understanding of basis is and from there, what it signals at different points in time.

<a href="http://wbc.agr.mt.gov/wbc/Buyers/Transportation/Charts/gfallsdnsbasis.pdf">Great Falls basis</a>

[bucket]

Charliep

You know you are missing the point right?

Here is the problem. No grainco is converting to Canadian dollars.

A zero basis and a straight across price from mpls with no foreign exchange is misleading.

They are hiding the fx.

[bucket]

Charliep

Good link.

Pnw price is 8.81usd for dns. Or 10 cdn.

Do you think Vancouver price is much different.?

[charliep]

Actually you are missing my point. I don't care what the basis they show on their websites is. I take the time to calculate the real basis and make my decisions based on my numbers.

Mention of protein spreads. You can find the spreadsheet on the Montana Wheat and Barley Committee site. Protein spreads are very wide south of us. DNS 13 percent protein is 85 cents under (similar to a 2CWRS 12.5). DNS 14 protein is 85 cents over (2CWRS 13.5). DNS 15 protein USD $2.05 over.

I would be binning high protein spring wheat in the current market. Would be selling lower (3CWRS) or lower protein (1/2 CWRS 12.5 protein or less. A lesson that will need to be learned early is wheat is not just one market. It is many markets. You need to find supply chain partners who will work with you to get the best value for what you have in the bin.

[charliep]

PNW and Vancouver prices should be similar.

[charliep]

One other comment is the extremely wide variation in grain company prices on any given day even within the same community. There is big difference between shit bids/sucker prices and prices that reflect actual business/need to attract grain. You really and truly do have to shop the market or develop a relationship where there is an open discussion about you have in the bin/an elevator representative that will work with you to get the best value.