US Wheat conditions.

[charliep]

Too many posts but another highlight was the use of the general purpose class and the ability of Canadian farmers to grow US DNS varieties and deliver into this class. This may alow an opportunity for US farmers to deliver to Canadian elevators.

Lots of things I truly admit I don't know. One will be the elevator systems move to reduce the number of wheat segregations on the one hand and on the other, the requirement to understand customer (in this case processor) needs and the ability of the logistics system to flow this grain through from the farm bin to the flour mill (just picking on one track.

If we are just producing plain Jane wheat, we likely have no advantage over Russia, Ukraine and Kazakstan in years they get high production.

[bucket]

charliep and errol - Questions.

I read different articles saying russian domestic wheat prices are climbing and they may have to import wheat to curb that? any comments.

Is the wheat supply errol talks about in the high quality wheats or the feeds?

Brazil is in the market for wheat because the argentina wheat crop is poor quality?

Just asking and can you guys put some context to the impact on prices going forward?

I am cautiously bullish now, waiting to see how this winter wheat crop comes out of dormancy, if it actually sprouted to go into dormancy.

[charliep]

Will let Errol have a crack. The answer is there is lots of uncertainty going ahead. The comment I will have is just to have a plan based on your businesses needs. The tools I would have in my toolbox would be 1) making sales/signing DDC contracts not because I think I can forecast the future but because it fits my business needs including profit targets and cashflow needs and 2) working on my skills/use of minimum price alternatives including options, grain company offering and SPE in Alberta (lock in a minimum price, pay the premium and keep the upside open). A weird expression but no one ever went broke selling at a profit.

[charliep]

Below is a link to a article ARD did on protein spreads. There is a graph with previous CWB protein spreads as reflected in final payments.

[URL="http://www1.agric.gov.ab.ca/$Department/deptdocs.nsf/all/sis14235"]Protein spreads[/URL]

[errolanderson]

U.S. wheat markets have made a modest
recovery of late, but the overall trend
still remains down (IMO). Wheat needs
fresh bullish news, beyond what the
market already knows.

Russian wheat prices have been climbing,
in fact U.S. wheat was the cheapest in
the world about 2 weeks ago. This has
stimulated American exports, but traders
remain quite cautious about the demand
for U.S. grain overall. Global stocks
are now in a modest recovery.

The U.S. has lost market influence in
global wheat markets. Asian and the
Black Sea are the up 'n comers.

From a cash market perspective, really
like prairie spring wheat new crop
contracting opportunities. Have always
been a fan of CPS red as it has always
been a dual market, even in the CWB
days.

If the U.S. southern plains doesn't
receive a solid shot-of-rain within the
next 6 weeks, spring wheat markets will
be interesting. But U.S. winter wheat
going into dormancy dry have ironically
produced bumper crops in past years.

[bucket]

errol. Thanks

Do you think the recovery in wheat stocks may have to do with lower cattle numbers in the states?

My theory is that if they closed a 4500 head/day slaughter house in texas, that equates to (4500 x 365) 1.5 million head per year that are no longer there producing calves. That is alot of feed no being chewed through.

Your thoughts?

[charliep]

I will let Errol answer your question

You like to make things complicated. Not a technician but what are the charts trying to tell you? Spreads in futures months? Changes in volume and open interest?

[errolanderson]

bucket . . . believe this herd reduction
is more an issue for corn than wheat.

Suspect that U.S. priced themselves out of
the global wheat market late summer and
turned off some buyers. They lost market
share. It's starting to come back now.

But it's always easier to lose a buyer and
earn one back.

[Burbert]

Let the whinning and snivelling continue.
Is there know end ta Comedian framers
looking fer a level field? Protein
spreads are bullshit at the besta times
cousin those machines is inaccurate,
duhhhhhhhhhhh! Grain companies make'em
say whatever they wants them ta say.......

[farmaholic]

Thanks for the protein chart Charlie.

Two things:
1: Under the circumstances, if Western
Canada is awash in protein and no one is
getting paid for above average protein,
then no one should be discounted for
below average protein either. If they
are, Handlers are taking the spread for
themselves, imagine that!!

2: We don't consume all we produce, with
that being said does it mean the World
is awash in protein also? Nobody needs
any high protein wheat to blend up some
poorer performing wheat?


Yeah I might be able to keep it til next
year and make payments and cash flow
operations with other commodities, but
the last time I checked bins aren't
free.