Markets

[boarderbloke]

Story on Bloomberg about record cold and spring frosts across southern and high plains.

[URL="http://www.bloomberg.com/news/2013-04-23/record-freeze-in-u-s-extending-wheat-crop-damage-commodities.html"]Record Freeze[/URL]

[boarderbloke]

Caught this on twitter(re cracker shutdown U.K.)

[URL="http://www.guardian.co.uk/business/2013/apr/22/weetabix-supplies-last-year-harvest"]Cracker Shutdown[/URL]

[charliep]

Your arguement is with the market - not me. If you believe the market is wrong, stay long. Just analyze what your business needs are including the ability to live with lower prices and your ability to cashflow/have extra bin space should it be necessary to hold into the fall.

I think I have said in the past high grade/protein wheat is the one crop I would carry into new crop. Not a guarantee of better price - just better opportunity.

If you follow wheat futures market spreads, spring wheat/MGEX has been the strongest market. SRW has been the weakest with conditions pretty darn favorable across the SE corner of the US.

[charliep]

Most recent USDA weekly crop progress report.

[URL="http://usda01.library.cornell.edu/usda/current/CropProg/CropProg-04-22-2013.pdf"]US crop condition[/URL]

It does highlight the lateness of the crop. Also the differences in the early spring growing conditions HRW versus SRW.

[jdepape]

Riders2010:

Here's where I get 20% of the canola crop still out
there.

Farm carryin plus production = 13.4 mmt (roughly)
Deliveries to date: 10.726 mmt, or about 80% of
what was on the farm, leaving about 20%

Another way to look at it:
On-farm stocks at Dec 31 = 7.4 mmt
Deliveries since then = 3.9 mmt
Leaving 3.5 mmt on-farm
This would be 26% of what we started with.

So it could actually be more than 20% left out
there.

Of course, the production estimate could be out of
whack.....

[jdepape]

Charlie:

You may be right about the potential for higher
protein premiums in the next crop year - this year
they were non existent.

But the fact remains that it will cost you about 60
cents per bu to carry through the inverse. A
combination of flat price and protein premiums will
have to gain that much just to break even.

I think a better approach would be to sell all old
crop before too long and shoot for high protein
wheat this upcoming year.

There are many opportunities to consider - its just
best to consider how much they are costing you
up front.

[ianben]

We and the UK as a whole did produce the crappist
wheat I have ever seen. Fusarium devastated it and
lack of sunshine produced bushel weights in the low
50s . Ensus thought they could extract the ethanol
from this low grade wheat and produce a saleable
animal feed from the bi product. I think it was a case
of crap in crap out, just a bit of a trial which didnt
work

We now have two ethanol plants with a 2 million
tonne capability .
Neither seem interested in producing ethanol in the
UK at the moment.

[Hopperbin]

jdepape what should 15.5 percent protein wheat pay in premium over 12.5 on an average year. I don't grow the hard red yet for a while but if I had some at 15.5 percent protein which we never grow around here I think I would be holding it also. Could it fetch a 2 dollar per bushel premium? Or more? Just hate to sell things out for under price. Would be hard to tell me to sell it for almost feed price.

[jdepape]

Hopper:

First, tell me what an average year is!

Protein premiums are a function of
supply/demand of protein. Last year saw good
production of high protein, and coupled with a
strong feed market, protein premiums were (are)
almost non- existent.

In 2010-11, we saw stronger premiums. At one
point, the premium for 14% over 13% (just on
percent of protein) got to $100/tonne ($2.72/bu)

Here's a chart.
http://www.cwb.ca/why-pool

What protein premiums will be this upcoming year
is anyone's guess. The data I've seen shows
protein premiums to be very volatile and
sometimes very substantial.

[errolanderson]

John . . . good to have you back on Agriville.

agree with your 20% left comment. Ag Canada is out-to-lunch in their 350,000 MT carryout. We believe it will be in the 500 to 600,000 MT neighborhood by crop year end.

Demand for old crop canola may get thin within the next month as exports die off and crushers focus on new crop.

Old crop canola is vulnerable to a late crop year sell-off (IMO). Wheat pricing was a lost opportunity for many.

[mbratrud]

I may be wrong but I would be surprised If there is 20% Canola left on Farm. I still believe carry out is going to be very very squeaky.

[Hopperbin]

Your 10 11 protein spread explains a bit. Typicallly we grow I would say 13.5 average here in our location and last year it was 15.5 plus. So here we would like to possibly store it for a better price in the new crop, stored wheat is looking awesome, but fusarium is an issue, also making it hard to market. Saving it into new crop could give blending possibilities or no fusarium testing as we have never had it so bad before. This year I was able to truck some soft wheat for export wheat trucking paid one hundred miles to the west where they did not care about fusarium cause it was a non issue at that location. As far as wheat I only have another years planting supply left. Canola still at 20 percent left. When I look at bunge's prices they still pay you for holding till June July although not much only 10 cents over may. Last delivery I asked the guy at Bunge if they export any canola and his answer was no they are trucking it all to their crushing plants. They need it and know it I thinking.