ND state owned mill wants CDN grain

[bucket]

Just read an article that they need canadian grain at the north dakota state owned mill.

These guys could do us a big favour by publicising the amount they pay for our grain. OR the could tell the cwb they will only buy from farmers direct.

Mark my words the cwb will f*** this up.

[AdamSmith]

Wheat prices hit record on crop failures
John Greenwood, Financial Post
Published: Tuesday, February 05, 2008

A stretch of cold, rainy weather in the middle of the wheat growing season on the Prairies is being blamed for a dramatic shortfall in stockpiles that in turn has pushed prices for the grain well into record territory.

"We are at price levels that are unprecedented," said Marlene Boersch, a partner at Mercantile Consulting Venture in Winnipeg.

Stockpiles of durum, used to make pasta and bread, were at 15.15 million tonnes at the end of December, down more than 30% a year ago, according to a report by Statistics Canada. For varieties excluding durum, supplies slumped the same proportion to 12.28 tonnes.

Concern sparked by dwindling inventories around the world helped lift prices above US$10 a bushel on the Chicago Board of Trade, North America's biggest grain market. On the Minneapolis Grain Exchange, the contract for March delivery jumped to US$14.63 a bushel, the highest ever.

"If we have one more bad crop in a major wheat producing area next year, this will seem like a picnic," said Larry Weber, owner of Weber Commodities in Saskatoon. "This is going to get out of control."

Global demand for everything from wheat and barley to corn has been soaring for the past 18 months, driven by a succession of droughts and crop failures in producing countries including Canada, the world's second-biggest exporter.

In addition, rising affluence in China and India has enabled the middle class there to move to more Western-style diets favouring wheat.

A third factor is the growth of the biofuel industry, where government subsidies in the United States and Europe have created an additional source of demand for grain crops.

The phenomenon has been a boon for farmers, who after decades of scraping by are now starting to see the benefit of stronger pricing in the form of higher incomes. Indeed, many newly prosperous Prairie growers are investing in new machinery and crop land, which is helping to lift the economy of the entire region.

Meanwhile, across the border in North Dakota, a state-owned flower mill in Grand Forks has ended a ban on buying wheat from Canada that has been in place since 1922.

For decades, U.S. growers have accused Canada of subsidizing its growers through the Canadian Wheat Board, an allegation Ottawa has denied. But North Dakota officials recently opted to end their battle with Ottawa in the interests of keeping their mill operating.

Another factor in the rising market is the emergence of hedge funds as major players in the market. How much institutional money is invested is unclear, but observers say growing interest from professional investors has had a significant impact, particularly in terms of increased volatility.

"There is a lot of trading by very large funds with massive speculative positions, so prices are not as closely tied to fundamentals as they were in the past," Ms. Boersch said.

The only downside for Canadian farmers is that the prices they get will not necessarily match the current market. They are required to take what is offered by the Canadian Wheat Board, which has a monopoly on wheat and barley sales in the Prairie provinces. The government of Prime Minister Stephen Harper plans to remove the wheat board's powers but has so far made little progress.

[AdamSmith]

...the prices they get will not necessarily match the current market. They are required to take what is offered by the Canadian Wheat Board,...

And the winner of the understatement of the year goes to...

You sure wouldn't want to tell all the grizzly details now would you, like the price diference between the CWB intial, the CWB PRO and the ND Spot price.

That would be way too informative,

Sheesh!