nice up day

[farmaholic]

So, the market is dysfunctional?

[mbdog]

wheat basis the lead indicator to watch....for what its worth.

[bucket]

Yup. Positive basis but the graincos will end up trying to move a multi grade crop in winter months. They have learned nothing.

Delays delays delays. Excuses.

[mbdog]

Dysfunctional? How can anyone take the futures market seriously with the basis swinging so wildly? Futures seem to be lagging indicator lately....guess that's just the way things are. Long paper wheat?

[charliep]

mbdog

I'll post the MGEX December chart and the weekly. I think the bottom is in on the futures side but have been wrong many times before. Just off the weekly chart, I would next few to see if futures prices push towards $6/bu or move back into the old trading range.

[URL="http://www.farms.com/markets/?page=chart&sym=MWZ14"]December[/URL]

<a href="http://www.farms.com/markets/?page=chart&sym=MWZ14&domain=farms&dis play_ice=1&enabled_ice_exchanges=&studies= Volume;&cancelstudy=&a=W">weekly&l t;/a>

On the basis side, I think they will continue to strenghthen on the quality side. If you have a lower protein or lower grade (bottom end 2/3), basis levels are likely to remain weak.

Will get me yelled at but wheat truly is a crop you will have to shop around this year and be patient with. Prices/delivery opportunities will reflect companies sales programs and timing. Over the past year, there is a great of variability in different companies wheat prices on any given day. I guess you guys liked the old world where there was a price (actually initial payment) but that is world is gone.

The advice remains know what you got in your bins, do your homework to find the opportunities and be patient to get the realistic price you want.

[charliep]

I will add that wheat basis varies greatly in the US. Much different than corn, soybeans and canola with basically one deliverable grade.

[charliep]

Way off the original topic but it is really and truly too bad we don't have a functional ICE futures Canada wheat contract. Basis would be a lot more visible and I suspect predictable. Spread trade with MGEX I think would keep the contracts in line and heavan forbid, create volume for both contracts.

[mbdog]

Charlie...don't pat me on the head. You skirted my point...and accused me of being a board supporter. Your thots on ICE have merit.

[charliep]

Not really aimed. Just frustrated at the overall themes here. It really truly is a year where paying attention and being disciplined will pay. I highlight again there is wide variation between different companies prices for similar wheat grades/proteins on any given day. Likely will get me beat on but knowing your grain company representatives/having a positive professional relationship (no need to be best friends) will be needed to understand their movement requirements better and from their better pricing opportunities.

[bucket]

That's the reason for weekly transparent reporting. It helps pay attention. In Canada there is **** all for a consistent report to compare to.

[mbdog]

You're frustrated!?!?!?
I view the basis improving on wheat as a positive fundamental. What is my grainco going to tell me that I don't already know?

[charliep]

This winter will be all about movement. The conversation would be about what's moving and when.

It will also be about blending. It will be about turning 3 into 2's and Canada into some form of 3. Will be hard to do in a lower quality year but everyone will try.

It will also be about meeting the needs of high quality markets like Japan. Not sure how the companies who are doing this business will lock in supplies/give the customer confidence they can meet delivery commitments.

[mbdog]

Charlie...for what its worth I sympathize with you and what you're trying to do. Basis volatility/ dimensions making it hard for me to use futures/options effectively is all. I do believe the current/evolving "market" system is the best system....if we're going way off topic.

[charliep]

It has been a steep learning curve. In the stuff I/ARD tried to highlight the challenges over the past 3 year. The first year of open market (2012/13) was not a typical year. Neither was 2013/14 nor will the curent crop year.

Even in the US with better reporting and other factors, wheat (particularly spring wheat) is harder crop to market starting with basis variability. That is with many years experience in an open market.