CWB Feed Barley Guaranteed Delivery Contract

[charliep]

Lots of questions today about feed barley relating to the the fact there are currently no delivery opportunities available (i.e. last guaranteed delivery contract ended on Oct. 15 and none being offered at the current time. Will let the CWB explain why. Will note however selling barley internationally will be like fishing - short periods of excitement followed by slow periods. Patience will be a virtue.

Found the following article interesting in emalt interesting.

USA: Barley prices retreat slightly from record highs

With lessening export demand, barley prices pulled back from their record high prices set in early October, according to Farm & Ranch Guide, October 26.

According to Larry Raap, grain merchandiser for Sun Prairie Grain in Minot, N.D., both Japan and Saudi Arabia have their barley needs filled at this time, although they may be back in the market later this year.

“They have got their belly full for the time being, but two months from now are they going to need more?” he questioned referring to the fact that earlier this fall they delayed tenders on feed barley purchases until December of this year.

With his location in the northern part of the region, Raap said he is getting a lot of calls from Canadians wanting to buy all of the corn they can get. This would free up their barley stocks for sale.

“And why wouldn't they buy corn at these prices and sell barley for six bucks?” he asked.

The export market has been the only action as far as feed barley is concerned, Raap noted, since corn is a far better value for feeders in this country.

[charliep]

The full article (plus one on durum) can be found in the farm and ranch guide.

http://www.farmandranchguide.com/articles/2007/10/31/ag_news/markets/mark15.txt

http://www.farmandranchguide.com/articles/2007/10/31/ag_news/markets/mark13.txt

[IAMTHEMOLE]

Exports better happen or its 'Katie bar the door'. Cattle leaving the country headed for cheap corn in the US. Canadian Livestock industry is not competitive by a long shot. Big trouble ahead.

[Zaphod]

Let me get this straight. The CWB closed down FPCs and BPCs on feed barley at the end of September. Then they shut off the GDC on October 15.

So is there any way that someone can actually deliver feed barley to the CWB after Oct 15? And there's no way of knowing how much feed barley they have accepted. It could be 500 tonnes or 500,000 tonnes. Meanwhile, they'll brag about the prices they achieved for the six guys who signed a contract. They are refusing to take more barley (and actually try to make a sale) from farmers who want to deliver. But they won't allow anyone else to export either. Unbelievable.

[TOM4CWB]

Dear Charlie,

I didn't get what was going on... signed up some feed barley in August.

I tried tonight. You are right.

I thought the normal A series contract would still be avaliable, with the CWB then to decide the acceptance level... whether 5 or 50 or 100% the CWB could have managed the pool and sold later in the year as the demand needed to be filled... not a cash fast delivery. A pool delivery.

The CWB has this wrong.

I found out... if I want to buy back my feed barley back... I must pay the CWB $297.27/t

... when the pool is $40/t below the US Producer Direct Price!

Why wouldn't I be allowed into the A Pool, when my barley is worth so much more in sales value?

Why is the CWB restricting my barley sale?

Only one answer... the "pro bono" feed policy is at work in the "designated area" for livestock producers.

The cross transfer of value from the grain grower to the livestock producer is massive.

Not only do we get MUCH lower prices.... everyone else on the planet will grow feed grains and backfill the market we refuse to sell to the highest bidder for the best price.

CWB Feed Barley/Wht marketing proves beyond the shadow of a doubt... the CWB is NOT here to maximise my grain returns... either short or long term.

[charliep]

TOM4CWB

Was this barley sold under the open market or contracted after. Still very confused by whats going on with feed barley. Lots of finger pointing but also lots of behind the scene dealing. If you assume that high prices/demand pulls supplies, then there are some pretty strange things goings on. I keep hearing the logistics capacity issue? Realizing that the first challenge is to attract supplies from farmers, how tough can it be to load unit trains and direct hit ships on the west coast?

I note IAMTHEMOLES comments about the domestic livestock industry. Better enjoy ice fishing through the winter because the ice will melt this spring and I wouldn't want to be stuck on the ice this spring/holding barley into next fall.

[TOM4CWB]

Charlie,

Our first barley sale was sold under the open market and contracted later. Then the CWB stole the Sept/Oct delivery period.

The CWB beat our delivery back to January 08.... then did GDC's two months later... then shipped ahead/first to a CWB pool who's sales stole our farms off the combine delivery opportunity from us to get the higher price for the pool.

The Pirates certainly have been busy down on the Jolly Rodger...

[TOM4CWB]

Charlie,

The feed barley we sold in August was "under" the open market prices... AND/BUT was also contracted to/thru the CWB...

[Zaphod]

The logistics argument is a crock. The CGC is showing that total exports of all grains to October 21 is 760,000 tonnes lower than last year. That's 63,000 tonnes a week. That's a big barley vessel every week, just to get up to last year's levels.

[TOM4CWB]

Zaphod,

I am unsure of what you are getting at.

Is it that the CWB could be making more sales, the trade could ship earlier than scheduled, what is your point?

We were told the CWB set the terms of the delivery logistics for the trade... for the allowance to complete the sale, & that delivery flexibility was not an option hence the delay in shipment of our shipment by over 3 months.

[charliep]

Should let Zaphod speak but my observation would be the same. Based on the numbers (nothing else), Vancouver/Prince Ruport has been less busy than a year ago. Lots of other factors in play so need to dig deeper.

Also have to look further into the winter. Canadian exports will be down in total so would expect a relatively slow winter export program unless in the supply chain (from farmer to grain company to CWB to accredited exporter) makes a concerted effort to have empty bins this summer.

[Zaphod]

All I'm saying is that the CWB's excuse for not making barley sales has been that the pipeline can't handle it. The numbers however, don't support their complaint. The total export volume of all crops so far this year is 760,000 tonnes less than last year. Clearly, there is capacity to do at least as much as last year, if not more. If we divide the 760,000 tonnes by 12 weeks (as of Oct 21), it means we are 63,000 tonnes a week behind last year, which is about the size of a Panamax barley vessel. But the CWB says they can't make barley sales because the system is all plugged up. What a crock! They need to come up with a better reason why they're not making sales and why signup for FPCs, BPCs and GDCs have been terminated early.