U.S. Average Wheat Prices

[melvill]

This out from the USDA December Agricultural Prices report:

The preliminary national average price received by farmers for all
wheat in December rose to $9.41/bu, up $2.05 from $7.36 in November
and $4.89 above the December 2006 average of $4.52.

The national average price received for winter wheat in December was
$9.22, up $1.90 from $7.32 in November and $4.69 above the December
2006 average of $4.53. The average price for durum was $14.70 per
bushel, up $3.60 from $11.10 in November and $9.96 above the December
2006 average of $4.74.

The price for spring wheat, at $9.16, was $2.14 above the November
average of $7.02 and $4.68 above the December 2006 average of $4.48.

[agstar77]

Averages show direction, but do you have volumes with these averages?

[melvill]

No, USDA doesn't publish any volume numbers with this report. As I understand it, the prices are a simple, daily average of offering prices, not a weighted average.

[melvill]

If you want to see the details, the actual report is available at:
http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1002

Some of the prices are shown as an index based on 1990-92 = 100. Some are shown in "nominal" (not adjusted for inflation) dollars.

There is a little bit on methodology on page 26 of the report. I stand corrected. Some of the sale price info appears to be weighted by volumn.

[silverback]

Are you trying to make a point AS?

[agstar77]

There probably isn't much wheat moving off farm at these levels, otherwise the price would not be this high. Most of last years crop was probably sold long ago.

[LWeber]

Page three, subsection 2 (a) from Board briefing booklet.

When approached with facts, use this rationale:

There probably isn't much wheat moving off farm at these levels, otherwise the price would not be this high. Most of last years crop was probably sold long ago.

On camera and radio:

Ensure you emphasize "this high".
Roll eyes.
Move hands towards sky.

Afterwards:
Phone Butch and Art.
Tell them the line still works after all these years.

[agstar77]

So you have data that shows significant on farm storage and/or hedging to get higher prices? I have always been under the impression that U.S. farmers don't store a large part of their crop. So if you are right prices will go higher before U.S. farmers sell. We have sold a portion of our canola crop at lower prices and I don't expect to get the highest price for all of it. Could you tell me if I should sell the rest of it now or wait for 13?

[charliep]

I find the arguement US farmers have sold out their wheat (as exhibited by high prices) at lower levels and are not participating in this rally strange to say the least. What evidence (other than the newspaper articles quoted in CWB press releases) can you provide to support this?

My guess is US spring wheat farmers are not much different than Canadian canola producers. They have sold some in the fall/early winter (Dec. 31 cgc canola delivery numbers of 4.1 MMT out of a total 2007 canola crop of 8.8 MMT). They are actively delivering canola at the current time which could be priced in the spot market and other that has been priced some time in the past year. They also have 6 MMT of inventory (have tossed in the July 31 carryin) which is either forward priced or they are storing in anticipation of higher prices.

I suspect that about 50 % of marketable canola supplies have been priced. The CWB has likely priced similar amounts of the 2007/08 pooling year (wheat ex durum). US farmers likely have about 75 % of their available wheat supplies priced but that reflects a May 31 crop year end and a market inverse that is telling them the market wants deliveries now.

Maybe I am missing something or there is other evidence.

[Ron]

Here we (I) dump CWB grains as soon as I can, no point hanging on to them, get the pittance initial and wait to find out how bad I am screwed over. Market the crops that have marketing options, canola, feed barley, etc.
I think the US farmers would treat wheat like we treat canola, forward contracting part but keeping options open?

SCREW THE CWB