no more than 60 days forward out of Cargill!!!

[northfarmer]

Cargill will now cease to offer contracts for any grains/oilseeds I grow and sell to them beyong 2 months out.....I have already sold canola into late 08 and 09, but there will be no more futures only, basis or flat priced out more than 60 days.....is this where the rest of them will go....and for how long will this last?

[Hopperbin]

I am just wondering if there is so much forward contracted at the moment that to contract more would somehow put them at risk if too many farmers cannot deliver.
There must be a record amount of forward contracts.

[dfarms11]

I asked my local Viterra CSR and he says that he sees less forward contracting than other years! Go figure that one!

[Burbert]

Maybe nobody is contracting out cause they figure that they got taken advantage of during the 07/08 crop year. Cause of the big prices available today Duhhhhhhhh fer those who got grain still in the binn! On the other hand they did make a profit didn't they, you can't go broke, if you make a profit eh........... Philosophy from AB Ag Dept...

[IAMTHEMOLE]

Why take on the added risk of running out of margin while they hedge a wide basis. Even Cargill has limitatons on capital. So they do nothing except cash business. It is not like we as producers can avoid dealing with them, there is only so much elevator space in western Canada. This way they can ensure their margins on the business they do is more profitable instead of having to cash flow a very difficult hedge position.

[craig]

Burbert
Such good logic. I sold too early last year.( dumb marketing, elevator company conspiracy) so this year when prices are at historic highs I should do nothing in case canola is at $20.00 and wheat at $15.00 in the fall. Oh yea wheat was at $15.00 already but not for us peons. Your grain is worth nothing until you sell it. We as producers shouldn't sell our crops at the highs of the market anyway. That would portray us as greedy and not caring about our fellow farmers.

[northfarmer]

Iamthemole....that is also my take on this...they have the balance sheet to cover the margin calls on the rising markets, but this ties up working capital and contrains the business/investment choices they make....in our area they were the only grainco do do a futures first two years out on canola....

what is the impact on the futures trade if the commercials back away from contracting out more than 60 days.....i would presume that would result in less volatility??, if they would not do contracts further out we could through broker accounts do our own thing?

[Burbert]

OK, so go ahead and pull the trigger, both barrels at the same time, if you wish! Each to his own, take the forward sales contracts and all the crazy conditions that are in fine print.

[IAMTHEMOLE]

There should be more of the open interest in the first two months of a futures contract and I would think a more predictable basis.