CWB feed barley purchases

[AdamSmith]

Charlie, I understand you don't like talking about the politics of grain, but when the politics of grain are such an interference into the market, how can one not comment.

What I see happening in the prairie barley market with the cwb buying from the open market within the single desk system, is good for those "who get the call". All of a sudden world market signals apply. But if your in an area like SW MB where obviously the cwb is not sourcing export feed barley, were left with no export feed barley market signal. The best offer yesterday was from JRI. JRI needs barley in order to fill a pre Aug1 open market deal. $3.75 delivered to Killarney mb.

If this was a canola deal and JRI was short, they would have to offer current market plus a premium in order to attract the canola to meet their obligations to their buyer.

That would mean $5.00 plus (Bottineau is paying $5) But since obviously the cwb has chosen not to source out of mb were stuck with domestic, corn influenced only feed barley prices in mb.or Alberta price less trucking to Alberta.

So instead of everyone knowing the rules and everyone knowing what to expect from the market, we're left with out-of-the blue, ivory tower decisions dictating who is allowed access to the world market and who is not allowed.

Under this situation, all the market savey and vigilent monitoring of the market gets you nothing in return.

[AdamSmith]

Also got confirmation yesterday from a producer south of Lethbridge that feed barley into Idaho for dairy use is priced at the dairy $5.25 bu US so same in Can $$
lots of trucks going that direction that could use extra business instead of running empty one way.
Prices are real opportunities are real. It's going to be a fight for my farm to even come close to my gross income of last year. 500 acres not seeded, what is isn't all that great yet being able to get the prices that we know are out ther, that could at least, bring me close to last years gross. Other than that the farm is going to take one heck of a hard kick in the ass. Lucky for farming on the Highway 2 corridor between Calgary and Red Deer, my land values continue to climb, and the banker is not breathing down my back.
How many others can say that?
Bitter today, cool and damp, just back from walking standing barley fields that are not drying in this weather. Frost is doing some work killing some of the green crap, but some weeds are sure holding on! Need dry warm weather and a month of it.
Erik

[Steve_Winkler]

I too got in on the Pioneer offer ... sort of. Only booked 5000 bu as I don't even have any barley combined yet (damn weather), that was Monday/Tuesday for $4.30/bu. January delivery. Wednesday/Thusday, price rockets to $4.66 bu. but no call from my elevator. :-( Good money regardless but just how high is it going to go and who's making how much in the middle?? These high dollars the Saudi's and others are paying are encouraging to say the least. Prices are getting to where they should have been many years earlier.

Good luck with the rest of your harvest, we are only about 25% done here SE of Calgary.

Steve

[charliep]

Before goes off the viewing screen, will note that feedback (Alberta at least) is that $4.50 to $4.60/bu pretty common across Alberta. Also am noting the concerns about harvest and impact on production.

Not suggesting that I wouldn't do anything different than all you are doing (sell to the highest bidder) but will note the problems for western Canada's barley users. Suspect there will be some sorting out in the livestock and malt industries which longer term will reduce consumption. The issue is that the local livestock/processing industry is there all the time whereas the current buzz in the international feed barley market is likely to be a 6 to 9 month phenomina. $430/tonne international barley prices are going to get a lot of attention/acres next year. Weather will keep things interesting as will corn competing for new crop acres in the US (note the carry between old and new crop).

[charliep]

When I have talked to people, several have questioned where the money goes in this transaction.

Alberta price - $215/tonne elevator.

Costs to port - Elevation - $15, rail freight - $30, cleaning - $5, port costs to load ship - $15, profit, CWB costs, carry - $5/tonne. Total $70/tonne.

Ocean freight (plus likely a little extra for interest costs while in transit) - $100/tonne.

Cost to elevator to Saudi Arabia - Somewheres around $170/tonne (doesn't matter Canadian or US these days).

Difference $430/tonne and $215/tonne - $215. Interesting question but where does the difference go?

[charliep]

A sign of insanity is talking to yourself but this market is too interesting to hold back. Feed barley prices in Portland (source CWB fax/will be in this weeks western producer) - $305 to $310/tonne FOB (loaded ship).

[TOM4CWB]

Charlie,

I appreciate your musings and insight!

What we really need to know is how much barley EXACTLY has been sold already this year.

I note with interest how Brazil keeps a running total of what % sold the Brazilian Soybean crop is... throughout the marketing cycle.

Why shouldn't this same info be avaliable to us from the CWB on Board grains?

Good accurate information will best serve and stabilise the market, and reduce volatility.

$10/bu wheat brings $3/bu wheat in normal situations. $5.00 feed barley usually means $2/bu is not far behind.

Or are we arrogant enough to believe history will not repeat itself?

[Barleyman]

Paterson grain in killarney mb 4.20 for feed barley plus they will pay storage to you. Delivery in a month or so when they buy enough carlots.