Wheat Is Flying

[cottonpicken]

Something strange is happening,wheat is AGAIN vertical in overnight trade.

[brian99]

What impresses me is the volume at these levels. A gap higher here? Wow. Blow off top coming or sustained prices at these levels?

[SASKFARMER3]

And in CANADA we will be
Always a Brides made never a bride and miss out again on the high prices because of our useless CWB (NDP LIBERAL MACHINE)
For months I have been looking at the World S/D and Wheat has been low then it froze in USA(they lie first then the truth comes out poor crop) now its Canada turn to lie (Elevator samples look poor, shriveled, sprouted etc, heat hurt) watch Australia their dry. But again because our genius only look at moving farmers product they sold most for low price (Warbiton is happy) and again Canadian farmers will Miss out on a Big Rally.
Love the CWB!

[northfarmer]

cp, I am watching this closely as well, with my combine parked in my winter wheat waiting for the daily rain to quit.......the unfortunate thing is this global meteroric rise in wheat prices is not being translated down to my delivered price....I have nonboard feed buyers watching the climbing FPC daily and no doubt following what is going in US and Paris....Argentina and AUS...but my net price today board or non board is scarcely a relfection of this market reality......you did call this wheat market and good on you, i was reluctant to forward price much earlier when normally i would of as i did by into yours and others logic about a new paradigm in pricing, but how do i get more of that to my bottom line now?

[cottonpicken]

North,the only thing i can tell you is what i have done-extend the hell out of my credit and store grain.I had to bye a bagger because all my bins are full of grain going back to 04.This has been a risky thing(i wouldnt recommend it to anyone) to do but i firmly believed back in 04 that good things were coming.

As far as the board they should be able to capture some of this and the pros as of this date really arnt that bad.

If wheat does what oil does that puts us around 15$.

[northfarmer]

I have had a bagger for years....frankly could not afford to hold onto all that inventory all that time, moved it at a gain, but nothing like holding it to now would have done for me.....feed wheat local bids right now are in the 4.50 range and all the feed wheat (sprouted) some sold for $1.60 to get rid of a couple of years back would have made money with the bags......

so yeah the pros are improving, but you are admittedly a guy who has held on to wait for stronger markets years out only to have your returns now diluted by a pooling system with no market discipline....does that not frustrate you....you will get several dollars less a bushel for this crop if sold in this pool versus selling it on your own if we had an open market....so i know for the average farmer with little or no exposure to marketing after the reliance on the cwb to do it for him might have a hard time reading all this market stuff and making the right call, he might need or benefit from the pooling, but folks like you and others that have the skills, learnt outside of farming, or from trading and selling other commodities like canola and oats, they could truly and undoublty benefit from making these pricing decisions on their own and outside of the board.....marketing and pricing ones production is such a critical succes factor to farming/business....

[btjadenlepp]

best you can do is a CWB Basis contract. i know everybody hates them, but if you can plug your nose and suck up the stupid basis, it does reduce your reliance on the pool and gives you control over pricing.

if history is any lesson, the basis and adjustment factor are only going to get worse as the futures blow off.

[northfarmer]

I agree on the basis, this is actually what one of my buyers is proposing, takes the pool out of the equation and once locked puts me on the market in the US

[NeilS]

I did just what Brenda sujested and took out a basis contract for zero basis, and am glad I did.

I have not sold any wheat into the pool for 5 years now, all of it going through basis contracts, and All of it at a premium to the pooled price. I will never participate in the pool again if I can avoid it.

[poorboy]

Cottonpicken,

Would you have not been better to have sold your grain in 2004 if it was top quality and then traded futures to capitalize on the wheat rally?

The basis on 1 cwrs wheat had been $20 over and now is a negative basis. Perhaps in relation to the futures prices in 2004, the cwb may have extracted more value than they are today.

If you had feed wheat then that is a different story.

How do you like your grain bagger? Do you fill it with a grain cart, truck, or ?

[kamichel]

North Farmer how do you calculate a basis is good? we have declining basis for 3 years now in the CWB of course this cannot continue, at some point the basis must move in the farmers favor. We must remember the buy out, in case the market goes against the producer. If in favor of the producer the producer gets screwed. If against the producer the producer gets screwed. This year I am royally screwed.

[northfarmer]

the basis sucks and is not getting better, the point is it is likely the best option, you take the CWB out of the equation, as someone said, hold your nose and sign up....than you price agaisnt the US market when you want to.... i have been screww4d by CWB buyouts before and you must takes this into consideration when assessing this plan...

IMHO, i still beleive freedom to market is the ultimate answer but is not available for this decision cycle....that is the real piss off!!!

[boarderbloke]

Saskfarmmer3, i don't understand why you'd want to be a bridesmaid! we have so much market information available to us now days, up to date info, not like years ago!!! why not have taken a position on the KCBT to price your winter wheat, and a position on the MGE for your spring and durum wheat, you'd be good money ahead! the cwb is irrelevant and we don't need it, and the wce doesn't have enough liquidity. everyone and their dog knew that wheat prices we going up big time, particular after the Easter frost in the southern states, all you had to do was check "real time" temperatures in the winter wheat areas that weekend and combine that with the knowledge and experience you have with frost here on the prairies to know there was going to be major damage. on April 9th you could have bought sept KCBT wheat for 4.80 (after the frost) on April 3rd it was 4.55! just the news that frost might be coming and did occur lifted the price 25 cents/bus between thoughs dates. today it closed at 7.81, why does anyone complain about the cwb, it's irrelevant to making money in the market place! Carl

[charliep]

As a caution to bullishness, I would look at the old/new crop inverse on wheat (now $2/bu). If I were to be long anything, it would be new crop. I note kamichel cautions about the old/new crop spread a while ago (has gone from a buck to $2/bushel) but this has to correct at some time.

Will also note the interesting and perhaps confusing wheat/corn spread. From a conference call today, US corn has potential to achieve close to 160 bushels/acre (the number today was in the 156 to 158 range). They also noted the scrap for 2008 acres among US crops starting with winter wheat this fall.

Note the above because the wheat PRO not only includes existing sales but also crop sold in the June to August period in competition with new crop winter wheat. Farmer delivery patterns also impact CWB PROs - particularly if farmers speculate/hold wheat into the summer of 2008 with the objective of playing the which crop year game.

[charliep]

A curiousity more than anything else but a note that I can never brag about anything because I am always a student of the market (Markets are never wrong - just market analysts). From my student eyes, I wonder how long this rally will last. Other rallies have been driven by strong demand (oilseeds increasing vegetable oil and protein consumption in China, corn by ethanol, etc.). Realizing wheat is a basic human food item, it has never had legs in the past (growth in consumption has only been at the rate of population growth). Will be interesting if India (and maybe China) policy direction on wheat will put a sustainable long term optimism into the international wheat prices.