Wheat Markets Continue Their Rally

[Tandem007]

Do you guys really feel that you are getting hosed that badly by your elevator or are you just here complaining cause nobody at your local coffee row or Jamaica row will listen to you?

[bgmb]

Tandem I think its pretty clear we are being hosed #1 13.5 cwrs is selling for 9.19 in vancouver and we are getting 6.50 here at best. Futures go up 30 cents in the last 2 days and cash price at the elevator doesnt change they just widen the basis. Why even have a futures market.

[farmaholic]

I apologize for not being clear as to what I tried to explain. I myself have never seen this approach before. The short of it is I am still vulnerable to discounts or premiums(ya right) at delivery....like every other ****ing contract except a new twist.

[Tandem007]

Are they - whoever has this fuz program - taking your high fuz grain? If the answer is yes, then you should be happy. The alternative is putting it in the grain stove to heat the shop. Don't sell to them if you aren't happy.

[bucket]

You guys realize graincos can buy a 40 tonne load of number 3 and a 40 tonne load of number 3 and ship an 80 tonne railcar of number 2. Right?

All day long? And I don't care if they do but at the very least don't insult me by saying you are doing me a favor.

[tweety]

Maybe we could have some sort of organization where everyone sold all the wheat thru and we all got a really good price and those darn grain companies wouldn't take us for a ride.

Reposted from a topic in July 5, 1935.

[bucket]

Tweety

Great idea if we could have got a really good price.

Sadly the cwb was selling our number 1 as a 3.

Proven by all the recent complaints from end users about canadian quality.

Graincos are not overselling their specs.

[errolanderson]

Charlie . . . U.S. wheat futures gains of late were led by fund buying, not a true improvement in global cash values.
This pressured basis levels. Also, sales are getting covered into late winter/early spring.

It is a buy the rumor, sell the fact type market (IMO). Excellent time to guard the futures side via put option or put option bear spreads. Like you said, if they were to expire worthless, that would be great news.

If Russia does cut wheat exports, this can easily be replaced by other global sellers. There is no shortage of wheat in the world.

[charliep]

Just curious how a grain company can take a 3CWRS wheat (based on CGC standards) and blend it with other 3CWRS (based on CGC standards) at the primary elevator and come up with a 2CWRS? Kinda like one plus one equals 3. I can see taking a border line 3CWRS and blending in with a solid 2CWRS to make lower end 2CWRS.

Isn't that part of a farmers job is to know what you have in the bin and negotiate the best deal?

For what is worth, everyone negotiated grade in the single desk days. Grain companies always established grade and protein. CGC has always and remains the final arbitrator on grade. Nothing new. Always been big dollars for anyone who could do it right. Some do better than others.

[bucket]

Charliep

Was told this by an elevator manager.

For an industry old timer you surprise me.

Here goes. First 40 tonne load comes on with fuzz. Second load had no fuzz but frost. By averaging down both factors in the blend it becomes a 2. Pretty simple.

I try to work with guys at the elevator to see where my grain with low fuzz can help. Then work the best deal.

Should they buy it as a 3 probably, but if it can help some graincos will pass on the upgrade. Some won't.