Wheat Markets Continue Their Rally

[farmaholic]

As noted in a previous thread I sold my wheat but it feels like I'm standing on a trap door that could open and I fall through anytime during delivery, getting hung. The gimmick is being called a "fusarium program". One in which they assign a "base grade" to the grain had it not been infected with fusarium. The risk to me is when I deliver and ACCORDING TO THEM it doesn't meet the base grade specs. Then there's always the option of using the CGC to settle the dispute but I already now
what they're calling it. And it won't be close to their assigned base grade.

I see it as a new angle to leave the door open ever so little to discount me if they WANT to. Now I know how the man on the gallows feels knowing any second that trap door could open and your hung.

Hoping for a stay of execution.

How would the Primary elevators like it if all the Producers went to a system of no contracting and each load was priced as it came up the driveway on spot prices only. If the price is what you like start hauling If they get stupid, quit.

We let them do this to us. Basis contracts. Futures first. Target prices. Then the contracts are finalized and they have a bunch of loop holes to slip through and we're shackled to a contract with little recourse if you don't like the way your being treated. Feeling a bit powerless this morning......

[bucket]

Why do say that tweety?

If I go to a dealership or grainco and discuss prices I think I am working.

Discussing it over a phone is work.

Taking the time to look up prices or news that affects farming is part of the job.

[mbdog]

The wheat markets continue to show strength. Basis is responding by eroding. The rather extreme move in basis this past fall would suggest wheat and wheat futures are undervalued...be it from supply or demand yet exposed through 2015.
Inspite of the rhetoric...and even if the market shits the bed into year end from here, I want to be long wheat. There are a few obvious technical levels where short money/sellers should stack up. Will give them due respect and may use them as potential trigger points for sales...but not today. And since the real risk resides in upside potential...I sit on the sidelines long bin and basis contracts.
I'm likely a seller 7.25-7.50 minny for rest of the month...with reownership somewhere/sometime deferred 2015. likely give it a try anyway on some...if it gets there. Don't have much Need 12$ to breakeven
I know this a Kansas/Chicago thread Charlie....saw the response you got on the minny thread. Not that I want to show my cards...but I think the take away from it is farmer's aren't stupid (not at all saying you are saying that), and they're mad at the world right now. Take it for what its worth, and keep up the good work.
Don't want to derail your thread...so back on track. There is a crop to market

[bucket]

Farmaholic

I remember growing lentils. The fall price was 6 cents. I told them they can rot in a bin for that. They graded a 3.

2 years later I sold them for a 2 at 32 cents. Don't lose hope.

I had 28 tonnes of heated flax at 12 percent heated due to late delivery. I grew more flax and turned that 28 tonnes into 13 bucks a bushel.

Grow more wheat and blend it off if they don't accept it.

I have made better money on shit grain than ever growing lots of number 1.

[crusher]

Sold some CPS this morning. The high of the marketing year, to date, for me. I din't have a previous basis. Still another 40% to sell. I think I may sell a bunch of canola, I don't see it pushing through $10/bu in the country. Maybe cover with some calls. I've got $70 basis so the net is ok.

[charliep]

I note the start was what to do with the rally.

Farmaholic - You perhaps have the best arguement in your post for having an active futures account to move some way (still have basis, grade and currency risk) to lock in a price and leave who deliver to open/use the spot market. Your choice to do whatever what but the futures market is providing a good opportunity. Is this the best opportunity - no idea. Don't want to use futures/be responsible for margin. Learn about and use put options. A cost yest but a way of locking in the futures portion of price. Success would be spending the money and having them expire worthless.

[farmaholic]

Mbdog. Do you even care what your grain grades and prices, dump it, and play with paper? No sarcasm what so ever.

[tweety]

Sure you do bucket. Its "work".

Couple hard months in spring and fall, rest is pretty easy sailing.

[charliep]

Most farmers I know play the blending game. Having good samples that representative of what is in the bins and has been graded by an independent source is hopefully where everyone starts. Yes grain companies blend. Blending is taking your border line crop inventory and mixing with better stuff. This has gone on from the beginning of time. Most farmers are pretty good at doing this.

Way off topic. This pricing discussion. There is a difference between between pricing and delivery. They can be separated if you choose to do so.

[rook]

How long ago was spring wheat basis a 60-70/t premium? I ask only for the purposes of kicking myself with hindsight. Around here it's negative to maybe 5 over.