Wheat Markets Continue Their Rally

[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.

[Hopperbin]

Fusarium is particularly a problem cause I think most elevators grain companies are having trouble blending up. Farmaholic are you saying your going to be downgraded to a feed? Then why sell without verbally discussing that with your particular grain company you sold to. I would have played it as your really willi g to get rid of this stuff soon and other grain companies are willing to blend up to x grade. And I would put some safety measure in there cause of your risk. Listen to bucket blend up. Charlie playing the futures I have a hard time understanding how that could help a steep grade discount as it could very well just make matters worse. Like someone punching a person and he falls down. Then before he can get up the train runs over him cause just so happened fell on a railway track.

[wmoebis]

I don't understand what relevance the base grade has unless they are willing to buy based on it?

I can pick out all the damaged kernels and give you a bases grade on everything that is left. Should end up being a #1 surely you had 1 good kernel.

[Hopperbin]

Strategie Grains trimmed its forecast for European Union wheat production next year, foreseeing a 7m-tonne drop from this year's result – although that would still leave the region with an above-average crop.The influential analysis group pegged the EU wheat harvest, the world's biggest, at 148.1m tonnes, down 600,000 tonnes from an outline forecast made last month.The downgrade reflects a reduced estimate for soft wheat area, now seen falling some 200,000 hectares to 24.0m hectares, thanks to weather setbacks to plantings in some countries in the south east of the bloc."The end of the sowing season was disrupted by heavy rain in Bulgaria, Hungary, Croatia, and to a smaller extent Italy," Strategie Grains said, if adding that "conditions for plant development were mostly good across Europe".Range of estimatesIndeed, the forecast crop, while down 7.0m tonnes year on year – largely reflecting expectations of 2m-tonne declines in harvests in both Germany and the UK from bumper 2014 levels - would still represent an unusually strong harvest.The four-year average, including 2014, is some 143m tonnes, on Strategie Grains data.The consultancy's estimate is also above a 147.3m-tonne forecast last week from European producers' group Copa-Cogeca, although below a 149m-tonne estimate from Lanworth, the US-based group which relies largely on satellite data in its analysis.Durum vs softStrategie Grains' forecast included an expectation of a 600,000-tonne bounce to 7.9m tonnes in production of durum, the type of hard wheat used in making pasta.This year's EU harvest was unusually low, depressed by poor weather in Italy, with Canada's output low too, a factor which kept durum prices at a rich premium to those of soft wheat.Output of soft wheat was pegged at 140.2m tonnes, down 7.6m tonnes year on year, although still above a four-year average of some 135m tonnes.The Paris-based group also forecast a drop of 2.1m tonnes to a three-year low of 58.0m tonnes in barley production next year, reflecting estimates of small declines in both area and yield.The corn harvest was estimated at 67.6m tonnes, down 6.4m tonnes from this year's bumper crop, but still a result which would be a little above-average.

[Oilking]

Rook, I think the premium was 60 to 70 cents per bushel, not per tonne.And that was during harvest

[farmaholic]

wmoebis. I realize that. But I guess what they're saying what it would be without the fusarium. Maybe the need the qualities it has(good falling number and protein, high falling number and good color). Their bid was way better than anyone elses but its that door that is slightly open that COULD hurt me. What was I supposed to do? The terminal and I had this conversation, they know I am aware but reassured me. Words versus contracts. Maybe I should have drove there and "shook on it"....those days are long gone. I even offered to bring them more representative samples. I want off these ****ing amusement rides already

[farmaholic]

wmoebis.....and no mildew in my samples.

[farmaholic]

wmoebis.....and no mildew in my samples.

[farmaholic]

I guess what I'm saying is I see the "chink in my armour".

[charliep]

Rantings of a mad man under Christmas stress.

Markets starting to fade now toward the close. A weird time of the year. Need to pay attention if you are pricing. I think there will be an end and retracement but that is an opinion.

Good Morning prairie talks about Russia waffling on getting export licenses for non-prime customers. Will be switching of some export to new sources. Will need to watch but I wouldn't let this over my short term marketing. Market shorts like this tend to get covered relatively quickly and then things return to normal.

I note the conversation always ends up with fusarium and mildew. From a customer (read miller/baker), the issues are mycotoxins and ocratoxins. A human health issue. If you don't think, eat some of your mildewed/fuzzy wheat. Again, the question is how you measure these things and the level of concern it is to customers.

[Daylate]

I would have priced with my fusarium level from samples in the price. Instead of leaving it out. Locking in a grade and worrying about three fuz after the haul. Maybe I'm confused but I think this is the issue, right?
I locked in a price based on a 3 to 4 % fuzz level. If better or worse I get that grade. Avg. 3.3 so far. Like already said. Good samples and an independent sample are worth gold in the new marketing system.