Charlie;
I note the CWB Basis is not at all in step with US cash prices... particularily PNW vs CDN West Coast.
Here was a report from my BASF "Weber Commodities Report"
"Although October has been a down month for U.S. grain futures, is has been bullish for cash basis, with stronger domestic premiums effectively offsetting almost half of the deterioration seen in exchange prices for many commodities. The end game will be played in the cash market - not in futures - but I’m looking for it this winter - not this fall. Cash bids for SWW in Montana are still at $10.00 (thanks Mark) - that equates to a positive basis of $1.79 1/2 over CBOT December wheat. In Canadian terms - that would be equal to a 65.95 basis on SWW rather than the -28.77 on the fixed price contract. That difference equates to $2.58 a bushel"
Why has the CWB wheat/barley basis not reflected the difference?
I note the recent CWB News Release:
"Newsroom
2007
CWB responds to inaccurate information on barley prices
October 18, 2007
Winnipeg - Ken Ritter, chair of the CWB's farmer-controlled board of directors, today responded to inaccurate information about barley prices.
Yesterday in the House of Commons, Prime Minister Stephen Harper said: "When it looked like there would be marketing choice for western barley farmers last spring, prices went up. When marketing choice was swept off the table, prices went down."
Ritter pointed out that barley prices have been climbing steadily and that the Prime Minister's comments create the mistaken impression that barley prices move up and down only in response to the prospects of an open market.
Ritter says the full story shows that from June 11 to July 31, 2007, grain companies anticipating an open barley market were offering farmers contracts of up to $4.75 per bushel for malting barley. However, since the federal court decision of July 31, which upheld single desk marketing of western Canadian barley, markets have climbed steadily to the point where the CWB is projecting returns for farmers of up to $5.06 per bushel at an Alberta farmgate. This estimated return may continue to rise as the CWB makes more sales at record values.
"Grain markets are governed by many factors, including supply and demand, competition, quality and customer preference," said Ritter. He noted that Prairie farmers can expect significantly higher returns this year than their American counterparts, due to the disciplined selling of the CWB.
For example, according to the president of the Washington Wheat Commission, many American farmers sold their wheat before the recent price surge - much of it at less than $5 per bushel. The CWB is indicating a return of $6.76 per bushel for No. 1 Canada Western Red Spring wheat 13.5 per cent protein, backed off to an Alberta farmgate.
In the case of durum, a high-quality pasta wheat, U.S. spot values are rising because many American farmers priced at around $7 per bushel when they thought the market had peaked, according to the marketing director of the North Dakota Wheat Commission. The CWB has been able to capture rising market values, recently making sales of Canada Western Amber Durum wheat at values as high as $18.50 per bushel.
Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. One of Canada's biggest exporters, the Winnipeg-based organization sells grain to over 70 countries and returns all sales revenue, less marketing costs to farmers.
-30-"
If the CWB had actually done what they say they did... what excuse is there for the CWB to totally distort the basis.... Cash FPC do not even closely resemble US Montana cash prices in Alberta!
CWB distorts our whole grain market in Alberta.
I Prepriced futures only... JUST LIKE MY AMERICAN FREINDS JUST ACROSS THE BORDER and the CWB appears ready and willing to steal/has already stole a good chunk of my 2007 wheat revenue.... on top of the lower prices I hedged. I am responsible for the futures. The CWB is responsible for the Basis.
What can be done with our Crop Insurance to counter act this huge distortion in the market... which means I am faced with MUCH lower prices than the US Farmers the CWB is "crowing" about?
EG: our Jan 07 Price @ $224/t for 1CWRS 13.5... should be returning $1.60/bu over the MGE futures hedged... yet the CWB is negative $8.77/t or negative $.23/bu... for a distortion of over $1.70/buCDN well over $60/t distorted by the CWB.
It means for the line share of our 07-08 CWB pricings... we will recieve $216/t INSTEAD of Fair Market Value of $280/t for our wheat that was hedged.
With a $50/t back off from west coast Canadian port CWB prices... this leaves our farm with $164/t for 1CWRS 13.5... and for the feed wheat the CDN system says much of our wheat is... this is an unbelievable mess!
If I do the Basis today Charlie... what is done with the #4 milling grade/feed wheat discount?
How will this be reflected (If at all) in Alberta Ag market pricings for our crop insurance... for instance?
Can you see why some of us are so tired of this whole wheat "game" ... we are told to "risk manage" and the gov.'s allow the CWB to totally distort the market and take us to the cleaners!
With CLub root on the move... we must grow MUCH more wheat... but guess what?
With the folks with a short yeild... we are all up the creek without a paddle... No crop insurance price coverage... and all our city cousins thinking we are literally rolling in the dough!
What can be done Charlie?
I note the CWB Basis is not at all in step with US cash prices... particularily PNW vs CDN West Coast.
Here was a report from my BASF "Weber Commodities Report"
"Although October has been a down month for U.S. grain futures, is has been bullish for cash basis, with stronger domestic premiums effectively offsetting almost half of the deterioration seen in exchange prices for many commodities. The end game will be played in the cash market - not in futures - but I’m looking for it this winter - not this fall. Cash bids for SWW in Montana are still at $10.00 (thanks Mark) - that equates to a positive basis of $1.79 1/2 over CBOT December wheat. In Canadian terms - that would be equal to a 65.95 basis on SWW rather than the -28.77 on the fixed price contract. That difference equates to $2.58 a bushel"
Why has the CWB wheat/barley basis not reflected the difference?
I note the recent CWB News Release:
"Newsroom
2007
CWB responds to inaccurate information on barley prices
October 18, 2007
Winnipeg - Ken Ritter, chair of the CWB's farmer-controlled board of directors, today responded to inaccurate information about barley prices.
Yesterday in the House of Commons, Prime Minister Stephen Harper said: "When it looked like there would be marketing choice for western barley farmers last spring, prices went up. When marketing choice was swept off the table, prices went down."
Ritter pointed out that barley prices have been climbing steadily and that the Prime Minister's comments create the mistaken impression that barley prices move up and down only in response to the prospects of an open market.
Ritter says the full story shows that from June 11 to July 31, 2007, grain companies anticipating an open barley market were offering farmers contracts of up to $4.75 per bushel for malting barley. However, since the federal court decision of July 31, which upheld single desk marketing of western Canadian barley, markets have climbed steadily to the point where the CWB is projecting returns for farmers of up to $5.06 per bushel at an Alberta farmgate. This estimated return may continue to rise as the CWB makes more sales at record values.
"Grain markets are governed by many factors, including supply and demand, competition, quality and customer preference," said Ritter. He noted that Prairie farmers can expect significantly higher returns this year than their American counterparts, due to the disciplined selling of the CWB.
For example, according to the president of the Washington Wheat Commission, many American farmers sold their wheat before the recent price surge - much of it at less than $5 per bushel. The CWB is indicating a return of $6.76 per bushel for No. 1 Canada Western Red Spring wheat 13.5 per cent protein, backed off to an Alberta farmgate.
In the case of durum, a high-quality pasta wheat, U.S. spot values are rising because many American farmers priced at around $7 per bushel when they thought the market had peaked, according to the marketing director of the North Dakota Wheat Commission. The CWB has been able to capture rising market values, recently making sales of Canada Western Amber Durum wheat at values as high as $18.50 per bushel.
Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. One of Canada's biggest exporters, the Winnipeg-based organization sells grain to over 70 countries and returns all sales revenue, less marketing costs to farmers.
-30-"
If the CWB had actually done what they say they did... what excuse is there for the CWB to totally distort the basis.... Cash FPC do not even closely resemble US Montana cash prices in Alberta!
CWB distorts our whole grain market in Alberta.
I Prepriced futures only... JUST LIKE MY AMERICAN FREINDS JUST ACROSS THE BORDER and the CWB appears ready and willing to steal/has already stole a good chunk of my 2007 wheat revenue.... on top of the lower prices I hedged. I am responsible for the futures. The CWB is responsible for the Basis.
What can be done with our Crop Insurance to counter act this huge distortion in the market... which means I am faced with MUCH lower prices than the US Farmers the CWB is "crowing" about?
EG: our Jan 07 Price @ $224/t for 1CWRS 13.5... should be returning $1.60/bu over the MGE futures hedged... yet the CWB is negative $8.77/t or negative $.23/bu... for a distortion of over $1.70/buCDN well over $60/t distorted by the CWB.
It means for the line share of our 07-08 CWB pricings... we will recieve $216/t INSTEAD of Fair Market Value of $280/t for our wheat that was hedged.
With a $50/t back off from west coast Canadian port CWB prices... this leaves our farm with $164/t for 1CWRS 13.5... and for the feed wheat the CDN system says much of our wheat is... this is an unbelievable mess!
If I do the Basis today Charlie... what is done with the #4 milling grade/feed wheat discount?
How will this be reflected (If at all) in Alberta Ag market pricings for our crop insurance... for instance?
Can you see why some of us are so tired of this whole wheat "game" ... we are told to "risk manage" and the gov.'s allow the CWB to totally distort the market and take us to the cleaners!
With CLub root on the move... we must grow MUCH more wheat... but guess what?
With the folks with a short yeild... we are all up the creek without a paddle... No crop insurance price coverage... and all our city cousins thinking we are literally rolling in the dough!
What can be done Charlie?
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