Grain News - Aug./Sept.

[charliep]

Anyone who get Grain News should pay particularly close attention to the articles on page 8.

The article on how the PRO is calculated is essentially accurate but not enough. Comments?

I admit to having to be amazed by the malt barley article.

Without going into the malt issue, it amazes me that the CWB would brag about not even being able to achieve a feed barley price in their PRO - some one from Saskatchewan will have to comment but my guess is that you had a strong look at $3/bu or $138/t for most of this past crop year and the money is all sitting in the bank. It would seen to suggest that 6 row malt barley was not even on the radar scene and most farmers were good marketers enough to sell to the highest priced market - the feed one.

I also find it entertaining when the CWB goes back to the 1993 continental barley market days to make their points. Just a note - I was working at the CWB in the sales department at this time. As usual, they are very selective in the information they relate. If they are going to bring up information, they should make sure everything is on the table about the time period. They had also better be prepared to have some of the same accountability for their own sales - eg. the year they shorted the California feed barley market).

A final point is that they should have at least referenced their US malt barley numbers - did they come out of the air or from a legitimate source?

[charliep]

This should be CWB GRAIN MATTERS - not grain news.

[charliep]

LOL...Charlie...Do you know where those two traders are who made the barley deals in California?

They are both still in the industry. One is in Minneapolis and the other is in Regina.

Regards

[danm]

Ok guys its now sept 16th & the pro has been increased to $3.60/bu in MB. I can get $3.68 on the feed market right now. Is $4.00 - $5 barley possible? I don't mind waiting. AU (agricore/united) has a malt program on. Accept at pit.
So what say you?

[TOM4CWB]

Danm;

If your barley is of malt quality, then it is obviously worth close to a dollar a bushel more than feed.

If you can wait, then the malt market will be the premium market...

Something is going to happen on the CWB and barley...


Keep track of the barley buyback values into the US, they might provide a cheaper exit to the US market, if the buyback can be done at a profitable time.

The maltsters have the CWB over a barrel, and the grain companies are going to try to bail the CWB out...

The CWB MUST come up with the malt barley, or buy the contract out at huge losses to the Malt pool.

Therefore, make sure you are Really REALLY happy with the Malt initial and BONUS payment at the elevator driveway, or don't go near the elevator.

Just about everything is being accepted as malt this year, as there is nothing for anyone to loose, when the CWB/Elevators can buy Malt at less than feed price... and only pay a part of that price now!!!

THIS leads me to believe that the Malt pool will be diluted significantly, leaving a real question on the soundness of the PRO, especially if prices take a dive next spring on feed.

The real essence is that the Feed Barley and Malt Barley pool are now one... as 70% of barley that is grown, is a malt variety, but little of it is usually selected, except for this year... where the elevator companies will collect anything that is offered as malt, then select the best out of this grain to go to the Maltsters...

Is this clear as MUD???

[charliep]

My strategy would be to sell what I need to for fall cash purposes to the feed market/store the rest.

The questions from here on in are as follows:

1) Cash flow needs.

2) Actual quality of crop - protein, germination, plumpness, presence of fusarium head blight/mycrotoxins associated with this disease, bushel weight, etc.

3) How close are you to a hog barn or feed mill? Malt quality barley will that meets their needs will be in hot demand this winter (assuming they are among the survivors of current ugly prices).

4) I don't know about Manitoba but seed will be in high demand this spring in Alberta. High germination malt barley means a good fit into this market.

5) Further direction of US corn. Look for a range of CBT corn prices of $2.50 to $3.00/bu this winter. Top end would push Manitoba feed barley prices close to $4/bu. $5/bu would have to be supported by higher corn prices than this range - possible but more likely later in the crop year. Rather than trying to hold for higher prices, I would rather sell feed barley on rallies(maybe some malt if you want a lottery ticket on the CWB malt barley pool) and replace with CBT corn calls this winter.

What are others thoughts.

[charliep]

Tom4cwb

Just a note that the maltsters/grain companies likely priced malt barley/actual seed based on the CWB forward contracted price - no winners here. It would also be interesting to look at the contract - what commitment doest the CWB make the trade in providing crop? If there is no malt barley, is the CWB (from there farmers) still on the hook or can the CWB simply walk away?

[TOM4CWB]

Charlie;

The seed issue for malt in Alberta will be really tricky.

With the zero tolerance on Fusarium for Alberta seed, there could be a real problem... as so much barley province wide has ended up baled or in the silage pit.

This could be another reason the elevator co.s are buying any malt production back in Alberta that they can get their hands on... to select seed from it as well...

CPS seed could be a big problem, and newer CWRS varieties... not to mention PBR... but if the co.s that own the variety own the common seed, it won't be a problem...

Regardless of what the official stand maltsters are taking on Preharvest on barley... it can still be checked for germ and used if the germ is still good, especially on wheat and barley... it has been done in the EU for over a decade! The preharvest must be done late, or there could be problems with seed barley and wheat...

[charliep]

I agree. All farm managers should be scouting out seed early for 2003 (likely even this fall). This is particularly the case if you are very variety specific. All seed brought into Alberta from out of province needs to be certified fusarium graminearum free.

That puts preasure on market analysts to come up with new crop forecasts. All crops have reasonably outlook so my philosophy would be to stick with your crop rotation. In the west side of the prairies, you also likely have to orient your thinking to drought tolerant crops.