wheat buddy is out.

[bucket]

Let's all agree the basis off mpls futures is a minus 1.60 a bushel cdn.


And the basis from the export market where the majority of grain goes by railcar either TB or vancouver is currently about a minus 3.50 a bushel cdn .

We good on that? Anyone that doesn't und er stand the real numbers is just blowing smoke.

And in reality it's been that way for a long long time.

[wmoebis]

When you deliver directly to the USA are you paid in US funds or Canadian?

If paid in Canadian do they make adjustment for difference in dollar?

[jdepape]

I always said I wouldn't bother responding to a posting by BTO but I guess anything can change....

BTO says:"Can Someone Please Explain This Phony Fcking Math Being Used To Convert The xChange Rate!!!!!!

I tried.

I see one mistake in BTO's math.
He says $5.76 USD - $0.20 Cdn = $5.56 Cdn

The mistake is the basis is <b>NOT</b> Cdn. It's not USD either. It's a conversion.

How do you think this stuff works? Take the export price in USD, Convert it to Cdn, then deduct all known costs to get it back to a farm price?

It doesn't work that way.

Let's say export price is $9.00/bu in USD
Converted to Cdn at 0.81 = 11.11
Known costs are freight etc = 1.50 (this includes what people believe the handling charge should be)

This should work back to SK with a bid of 9.61/bu

Now that you have a price out there, and the wheat starts flowing in, you need to address the question, is it coming in fast enough, too fat, or not fast enough? If it comes in faster than you need it, building up stocks, you will want to lower your price to slow things down.

But what about the risk of demurrage, extra shifting costs, contract cancellation charges, etc (like we had last year). If you don't protect yourself from these potential problems in your price, you could lose money.

After last year, what do you think the chances are that graincos will get hit with more this year? I can tell you, they believe the chances are high and they are pricing accordingly.

Think about it - If someone came to you and said I will sell you wheat for $5.00/bu, who in their right mind would say - "forget that! I'll pay you $6.00!

So now with all the costs in play - <b>and all the risks and uncertainty - and willing and eager sellers</b> you have a price - and it's much worse than what the "costs" would suggest.

Do graincos make more money when this happens? Of course.

And to your question of "where's the FX?" It's there - it's not hidden - take another look.

In times of greater uncertainty - and when farms just keep selling - "costs" in the price (like freight and FX) are overwhelmed with risk factors and plain vanilla supply vs demand.

Perhaps the biggest price factor right now is farmer selling.

[charliep]

Any comments on variability in basis. I will note in Alberta anyway, local elevator bids can have up to a 50 cent range for same wheat in the same generalized area. This to me is a signal about who (grain company) wants the wheat to work logistics on a sale. Prices are relatively available via text and direct contact. It is then a matter for farmers to set targets and shop the market including forward bids.

I also note your comments over time about farmers ability to separate storage, delivery commitment and pricing. The most powerful tool a farmer in their tool box if they know how to use it.

[BTO_farmalll]

Dape',

You Really Believe That Drivel You Just Spewed, Lmfao!!!!!!! In Reality Yes it Does Work Like That!!!!!! If This is Such a Big Deal fer The Grain Buyin Cronies, And Risks, And Uncertainties, And On, And On, And On!!!!! Then Why Not Cut The Bullsh!t and Pay Us in USD Then!!!!!! I Will use Majic Myself and Convert USD 2 CDN, Thank You Very Much!!!!!!!!!

[jdepape]

You want to sell in USD?
Fine. Here's what you're looking at:
#1 CWRS 13.5 - somewhere in SK

$5.80/bu CAD

OR

$4.70/bu USD

If you want a USD basis, that would be 106 under March Mpls.

You can figure out the FX rate....

[BTO_farmalll]

No, No, No, No Dape', Thats Not The Way Reality Works in The Real World!!!!!!!! Only in Comedia Where The Lowest Price is The Law!!!!!!!! And Dape', Where Yous Getting This Phony Fckin Basis #'S at????? You Guys Pull em' Outta yer A$$ er What!!!!!!!!!

[BTO_farmalll]

To Me This is Reality - $5.76 US Convert = $7.16 CDN Minus Say $0.20 Basis is Plenty Margin fer These Crooks = $6.96 Net CDN - Now Thats Reality!!!!!! Freight Can Come Outta The Port Price, Dey Aint Hosing Me fer That Too!!!!!!

Dape',

Curious To Know Why When These Crooks Buy Grain, They Use Majic To Convert The xChange, BUT When Selling Us Fertilizer its Straight Forward Math - US Price (Based on NOLA) x FX = CDN Price Charged to Dumb Farmer

Hmmmmmmmmmm???????????

[jdepape]

Mar futures = $5.76 USD
Cash price = $4.70 USD
Diff (basis) = 1.06 USD under

Or do it like bucket wants to:

Ftrs at 5.76 USD = 7.11 CAD
Cash price = $5.80 CAD
Basis = 1.31 CAD under

Or do it the way the trade does it:
Ftrs at 5.76 USD
Cash price = $5.80 CAD
Basis = 0.04 over (FX included)

No matter which way you do it, the cash price is the same.

[jdepape]

Now there's your mistake BTO.

<b>BASIS is not their MARGIN.</b>

[farmaholic]

Larry should post a sample of his product to encourage subscriptions. People will likely need to be on blood pressure pills after they subscribe.

Prices will always be just high enough to keep you from going broke or keep you in the game. There's rooms full of people calculating your COP, you better hope you grow at least average crops to remain playing... both sides too, inputs and crop
prices. They know our business as good as us if not
better. You will be "lucky" enough to hit
the odd home run or grand slam but only afew in your career. Good luck.

[BTO_farmalll]

Dape',

Yes I Know How They are Calculating The Basis and xChange!!!!!! What You are Failing to Do is Explain WHY They Use Majic To Arrive at The CDN Price!!!!!!!! And While yer At It Explain The Straight Forward Math Used 2 Sell Us Fertilizer!!!!!!!