FX in grain marketing

[tweety]

Two very good points:

We don't know what the costs are to get a bushel of wheat to port.

Farmers sell it for too less and then whine.

[jdepape]

Bucket - you talk of people not remembering how things arbitrage yet you seem to have forgotten. "Things" don't arbitrage - people do.

And this idea that prices need to be the same - or close. What is close for one is miles apart for another.

The fact that you are reporting the differences yet not capturing the higher prices you see in ND suggests you think its not worth the trouble. In your view, the extra 75 cents doesn't cover your extra cost and trouble. Fair enough.

In other words, you're indifferent. By the way, that's the textbook definition of two markets that have arbitraged. Not prices that are exactly the same, or even close - markets have arbitraged when market participants are indifferent between the two prices.

The fact that they aren't that close suggests this market is not efficient - there aren't enough players who
(1) are aware of the price difference,
(2) are capable of taking advantage of the higher price and
(3) willing to.


And the moral of my earlier story is simple -

there are some people you will never please.

[farmaholic]

Ooops, fat finger typing/dyslexia. I meant $2.27 not $2.77, 50 cents is quite a bit of a difference in this case.

Tweety, I still think knowing all the costs of what makes up the basis is necessary. How else can it be determined if its fair?

[SASKFARMER3]

Depp its about money. Follow it if were not getting a fair shake in Canada.
Answer how come the grain companies margins on wheat have gone from a fair 25 to 35 to 90 to a obscene 125 a ton.
Just answer where that money came from.
Rather a simple question. Your the guy with who wrote the book answer the question. Were just the Dumb farmers who doo all the work.
Have a great day.

[bucket]

Minot north dakota to the pnw is roughly the same distance as moose jaw to Vancouver.


Let's think about that.

Should prices be much different for the same market?

[SASKFARMER3]

Follow the Money. Canada Grain companies are enjoying the new way.

[bucket]

And the spokesman is helping them achieve their goals.

I think he got all the conservatives MPs staff and gave them a quick tutorial from his book.

Seems they are on side with the graincos explanation of the large discrepancy in prices.

[tweety]

Saskfarmer, How do you come up with those numbers?

Why isn't the complaining happening in other crops? Canola? Oats?

[SASKFARMER3]

Ask depp to explain the margins since he is aligned with them!
It's a very simple question how much have their margins gone up the last two years?

[jdepape]

SASKFARMER3

I "explained" that already - in this thread.

posted Feb 4, 2015 10:27

[jdepape]

bucket:
"discrepancy"?

Based on prices you posted here, the spread between Moose Jaw and some place in ND is 50 cents CAD.

You said $1.00 but really it's not. Your prices - 5.75 to 6.00 in Moose Jaw, 6.50 in ND.

If you're shopping, the 5.75 is a non-starter, so really it's between 6.00 in Moose Jaw and 6.50 in ND.

That's about $18.37/tonne. What would it cost to drive past Moose Jaw and keep on truckin' down to ND? Probably not far off the $18. Set me straight if I'm wrong.

If that's true, your net price back on the farm is pretty close to the same to either buyer.

Looks to me that the market is working.

[tweety]

John, can you start this thread again since it doesn't bump at all to top.

[SASKFARMER3]

Dep maybe explain it again were kind of slow out west.
Explain how grain company margins have increased from 25 to 35 to 90 to 125. Please show us again.
And show where the money is coming from?
Thanks