Why is US Hard Red Spring UP in PNW so much?

[TOM4CWB]

Charlie,

DTN reports interesting issues that explain why this market is going into orbit:

The U.S. PNW export market going through the roof with basis levels $1.40/bu stronger for February and $1.42 higher for March shipment at $4 and $4.05/bu over the May futures. PNW supplies are very tight in the export market. Exporters must raise basis levels in order to fill ships that have been booked. Cargoes of different kinds of wheat have recently been sold out of the PNW into Asian markets because ocean freight costs have decreased. Wheat is very hard to get into PNW position to ship, and with a very tight market, the PNW must outbid all competing markets.

[TOM4CWB]

Charlie,

What a nightmare.

How is a "designated area" wheat supposed to compete with this.

A Montana farmer is able to pay off debts, inject cash to buy inputs, prepare for the next generation... all because the CWB shuts us out of the market.

On top... end users are changing and substituting other produce... reducing demand for our CWRS wheat... while we are forced to hold wheat in our bins.

The CWB C series warnings... are criminal.

There should be unlimited free flow of "designated area" wheat... going to any corner of the globe... by any means possible... if we had any brains at all.

We are killing our wheat market that we must depend on next year.

[charliep]

It is always difficult to comment on a pooled price versus a spot cash price. I can look at evidence though.

From the CWB website, you can compare the dpc (daily cash price) to the fpc (cash price related to the overall pricing pools) to the pooled price (average price for the year). See the historical pricing area.

http://www.cwb.ca/public/en/farmers/producer/historical/pdf/2007-08/0708dpccharts.pdf

If there was an open market, lots of farmers would be moving wheat south (increased competition) and perhaps backhauling fertilizer. Implication is that it would more than the daily price contract holders that would be enjoying the full benefits of the current rally. An example of where competition is good going both directions.

[freewheat]

Charlie, you mention if there was an open mkt. farmers would be moving grain south. I don't believe we would have to move our grain south, we would have stronger prices here at home. this is one thing i always laugh at the pro board guys about; They say, "but we can't move all our wheat south", or "do you think the americans would allow all of us to export our wheat down there? they'd shut us down!!!"

My point is that we would not have to move a kernel south. If it were a true open market, why would we? Our market would pay for it right here, in Canada. We don't have to move our canola, flax, peas south to get a better price. In fact, last time I checked we were getting better prices than the americans for these crops... Why not wheat?

[TOM4CWB]

Freewheat.

Movement south by truck... and west by container... would both be at high velocity. Especially by container.

We are so missing the boat on this one... it is truly sad.

[TOM4CWB]

Incognito,

I see this;

"Spring Wheat Untethered
If it goes much higher, we'll be calling in the UFO experts! The DTN cash HRS index added another 48 cents on Wednesday, indicating the average price in the country at $14.59 a bushel.

The gain included another 18 cents stronger basis.

With limit-up futures also in Chicago and Kansas City coupled with 2-cent gains in average basis, the SRW and HRW indexes were each 32 cents higher on the day.

The corn index pulled back by a penny, and the soybean index fell 2 cents.

Widespread snowfall may discourage much grain movement in the Midwest again today, although overnight trade was higher (yes, wheat futures were again limit-up), so producers may find some attractive bids at the opening bell."
http://www.webercommodities.com/index.cfm?show=76

This market has to come back to earth at some time... but when!?

That is a million dollar question... literally!

[LWeber]

Cash in the PNW was up another 50 cents yesterday to $17.55

futures cant keep up

[tower]

Perhaps part of the reason why prices are up un the pnw is as a result of the following

http://news.bbc.co.uk/2/hi/asia-pacific/7219092.stm

Communist Party official Chen Xiwen warned of a serious impact on crop production in the south of the country.

"The impact on fresh vegetables and on fruit in some places has been catastrophic," he said.

"If it heads northward, then the impact on the whole year's grain production will be noticeable."

China is really getting worried. With the olympics just a short way off food riots probably aren't an option they want to consider. The Asian Markets are looking for other suppliers.