DPC $9.26 Saskatchewan!

[SASKFARMER3]

The DPC or LOTTO CWB Is at 9.26 today freight off price.
Finally something to be proud of any time one can get close to $10.00 a bushel for their HRS is a milestone.
Do I think it can go higher you bet but for now its nice to see where its at. Maybe the world has finally realized that the one crop that's a staple for all meals Bread has been ignored for way to long and now we have Days left of the product.
Lets hope 15 is in the Cards. Should be! Possible!
Cash Prices
Location 12/31/07 1/31/08 2/29/08 3/31/08 5/31/08 NC SP WHT
Minot 10.12 10.14 10.19 10.19 9.88 7.90
Bowbells 10.17 10.19 10.24 10.24 9.93 7.95
Mohall 10.12 10.14 10.19 10.19 9.88 7.90
Ryder 10.12 10.14 10.19 10.19 9.88 7.90
Niobe 10.09 10.11 10.16 10.16 9.85 7.87
Norma 10.12 10.14 10.19 10.19 9.88 7.90
Lignite 10.09 10.11 10.16 10.16 9.85 7.87
Velva 10.12 10.14 10.19 10.19 9.88 7.90
Getting closer CWB, Just not their yet!

[GrainBeetle]

SK3:

I locked in 1650 tonnes of hrs on a cwb march/08 basis contract for $1.96 over and have not priced the futures yet.

Can you tell me when I should lock in the futures, or should I play the inverse and increase my basis price and roll the contracts to may/08 or jul/09 instead?

I want the highest price of the year, and it seems you have the answers.

I will monitor this recomemdation to see how you measure up on july 31.

Thanks in advance for your recommendation(s).

[SASKFARMER3]

Grain beatle you sound like a smart individual that has studied the CWB program and has a good understanding of it. Find a price that you can live with and run with it. One note its Dry in India and they still feel they will produce the 75 Million ton crop like last year. Can prices go higher You bet for one reason and one reason only the world for two long has been happy with a few weeks of product and maybe just maybe the time has finally come that Wheat a main staple for much of the Modern world is going to follow Oil and move way up in value. So you I think know my answer.

[charliep]

Just an interesting note that the fpc with a $1.96 basis will actually provide a higher price than the dpc yesterday. dpc $392.20 dec 13. Mar fpc $393.86 plus basis in this case.

Both are substantially better than the PRO.

Will be interesting to see how effective CWB risk management strategies are around the fpc program in volatile market like the current. A mute point given no one will know the end result of the 2006/07 pooling year until the annual report is released in February.

[charliep]

Will note the widening of spreads today. March MGE wheat up 26 1/4 cents. Dec 2008 down 15 1/2 cents. The march to dec spread now $2.30/bu. I also note another Western Producer article highlighting that the CWB will not guarantee to take any wheat on the "C" series. Don't know if this grain committed on the "A" series but will have to contract on the "B" for sure. Since you are both holding a winning hand (have a CWB PPO in a rising market), what strategies will you follow in the months ahead?

[charliep]

Observations.

1) Two farmers with a different view of the CWB will price wheat for over $9/bu, a substantial premium to the pooled price.

2) Somewhere between 25 to 50 % of the 2007/08 CWB wheat ex durum deliveries will be priced using some form of producer pricing option.

3) The cost of the CWB producer pricing options is expensive and born by the farmers using the program. At the same time, the programs also present risk to the CWB which will show up in a substantial increase in the contingency fund or a major draw down in the fund. Outside of the CWB themselves, there is no tracking of/accountability for the money associated with managing risk in these programs. Much of this risk is because the CWB manages PPO price risk across the whole pooling year.

[SASKFARMER3]

But charlie Two farmers with different views for the CWB, yes But One Relative 100 Miles strait south of my farm gets?
Bowbells 10.38 10.40 10.45 10.45 10.08
That's Now January etc freight off.
Again were not getting our fair share.

[charliep]

All I can answer to your question is that the price provided are accurate and provide a true representation of the US market. Farmers can make their own conclusion.

To highlight the other points, farmers are using the producer pricing options (not willing to accept just an initial payment) and this will present the CWB will a whole bunch of challenges in the future because of how they manage the risk of these programs relative to the over all pooling accounts.

[TOM4CWB]

Charlie,

When it comes to 'RISK' to the CWB... this whole system is either a 'Joke" or a massive cover up!

If I need a simple cash price.... when I drop my wheat of barley in the elevator pit... when there should be the least risk for the transaction possible for all industry members...

Why does the CWB refuse such a simple tool?

Is it because the CWB knows price transparency would kill the CWB?

W H Y is the CWB S O afraid?

How could "designated area" grain growers be so dense... that we still don't realise why the CWB won't provide competitive prices let alone 'premium' prices!

Are we all really this stupid?

PPOs are a trap.

THe CWB forces growers into using pre-pricing tools and insane basis rip off levels... BECAUSE the most logical and least risk cash pricing tools are not provided!

And this is all done to save the POOLS?

ARE they that badly managed... is the CWB covering up sooo much... that the only way to keep 'designated area' growers from revolting... is to rip them off twice as much on what 'should be' the least risky and most efficient sales tools that provide the highest prices?

AND

This is completely outside the delivery basis issue! I am just asking the CWB provide a reasonable cash tool WHEN I have waited around for them to finally accept my produce!

NOW I hear the CWB is even going to restrict and put the screws to us on delivery of our ripped off PPO's.

I am waiting for the other shoe to drop!

What do you think the restrictions will be Charlie?

[SASKFARMER3]

Charlie
All I can answer to your question is that the price provided are accurate and provide a true representation of the US market.
Price Bow Bells ND, Gee charlie that's just south of Saskatchewan by 20 miles they have same wheat production, freight, costs etc. as us wouldn't this be an accurate point for prices? Not somewhere in US that doesn't even grow much HRS.
Minot 10.33 10.35 10.40 10.40 10.03 7.75
Bowbells 10.38 10.40 10.45 10.45 10.08 7.80

Bow Bell Friday's price, whats wrong with these locations, If i could haul my own grain It would go to one of these two locations NOT CRAP FALLS KANSAS OR IOWA OR TEXAS OR WHAT EVER THE CWB USES??

[charliep]

Hate it when I become the CWB representitive (even on the technical side).

To both. The DPC is not a cash price. It is a survey of northern tier US states (precise locations not disclosed) adjusted (likely by a freight factor deduction) back to a central Saskatchewan elevator and finally converted to Vancouver. When you get paid, the price is Vancouver minus deductions (including rail freight). Implications are a Peace River farmer could have a better price than you do sask3 inspite of the fact you are closer to US elevators who ship to the milling market in Minneapolis - not Portland. The CWB has already told us they are taking an extra $5/tonne off to handle risk but could be more.

tom4cwb - Have not heard anything about restrictions on the FPC other than the CWB requests to get all wheat possible signed on the "B" series. My sense the CWB is very aware of the inverse and are likely to force farmers who are contracted to delivery winter/early spring versus summer. Realizing again we don't even know what happened to the contingency fund in 2006/07, volatile markets like 2007/08 are going to present extreme challenges for the CWB both in terms of futures and basis. The obvious answer would be for the CWB to go to direct cash pricing but the board of directors is not there (look at the fight going over malt barley).

[Hermes]

C contract???? Charlie is this true???
Charlie are you telling me, in a market screaming for Wheat, the CWB can't sell out a c contract?
Another example of how incompetent these fools are!!!!

[NDHAWK]

They could sell out a C contract,but not at a price loss to the A/B. HRS has a $2.30(fri dec 14) old crop-new crop inverse.There would be plenty of whining if they took a significant tonnage and the result lowered the total returns of the pool. The CWB will do everything possible to make the pooling option look good this year,but even the stauchest of CWB supporters are doubting they can match what is being offered today at any and every elevator in the USA.
Time for a change,everything/everybody becomes outdated and obselete at some point in time- it is just hard to admit your time has passed.

[charliep]

I likely agree with the CWB comments/potential decision not to take wheat on the "C" series. Given the inverse in the market (there for everyone to see today), there is too much risk for the pricing pools.

What is needed is some other tools to allow delivery at the end of the crop year and a price that reflects the market then. Could be a separate pool. Could be a producer pricing option for the summer. Could be cash pricing.

[wmoebis]

I have often thought of this. Would a pool that is ended biannualy, triannualy, quarterly or even monthly be possable and feasable.

would our infrastucture be able to cost effectively and physically, handle this. Would the farmers, the grain companies, the railroads be able to clear the system to make these changes. Would the cost of managing this system at the farm, the handling system, the marketing system off set any extra possable profits? What would be the impact to our buyers?