CWB feed barley purchases

[crusher]

Charlie,

I'm from Edmonton, I'd like $4.50. Can you point me in the right direction?

[Burbert]

Oh boy, oh boy, oh boy, great to be a Western Comedian Framer these days ain't it. And just think, this is all cause the rebels on Angriville and their dinosaur PC minions have created a turly open market fer barley beans and are tretening wholesale revolting behaviour! Jus think what we kin do, when we begin to create cornfusion cause we grow only the best and most of the barley beans available to Comedian consumerrrrs!!!! Our loon is today soaring with the eagle , Wow, go Angriville, gooo!!!

[Burbert]

Pioneer Grain at Olds had spot feed price of $4.61 on thursday for shippment Jan/Feb
Missed out on this as I was traveling back from Saskatoon that day.
This was done by Pioneer merchants and not by the barley merchants at the CWB. Yet Pioneer must have to pay tookage to the CWB for the sale natrually.
Have got some target masters in as indications are they know they can get the barley, so will be trying to make more sales.
Erik

[charliep]

Actually can't except what people tell me. Sounds like not wide spread so just checking to see what others are hearing.

You can do the math as well. The $430/tonne mentioned in the article is real. Lets assume $100/tonne ocean freight. That puts the price at $330 at west coast port. Assuming $50 CWB/open market deductions and and additional $15/tonne for fobbing (loading a vessel), that puts the local based price at $265/tonne or $5.75/bu.

You can work back a more conservative number for the Portland prices the CWB provides the media (see page 8 of Sept. 20 edition western producer). The same deductions put the Alberta price at $210 to $215/tonne or $4.50/bu.

[charliep]

Thanks for confirming erik. Nice to talk about a market opportunity versus politics.

[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?