Is CWB China's Preferred Supplier?

[TOM4CWB]

Charlie;

At the CWB C and C meeting in Nisku in Dec 03, Brian White insisted the CWB was China's Preferred supplier.

I see this and wonder...


"CHINA'S GRAIN BUYERS TO PARTICIPATE IN WORKING SESSION WITH N.D. WHEAT COMMISSION

3/5/2004

Recent Hard Red Spring Wheat Purchases Boost Local Cash Prices.

Bismarck, N.D., March 4, 2004 — After expressing a willingness to purchase at least 3 million metric tons (110 million bushels) of U.S. wheat during the 2004-05 crop year at a ceremony today in Pierre, S.D., officials from China's government grain buying agency are traveling here for meetings with the North Dakota Wheat Commission.


With all classes of U.S. wheat combined, China now has almost 51 million bushels of purchases for this marketing year, and an additional 54 million bushels for 2004-05. With today's memorandum of understanding, it appears that new crop sales of an additional 56 million bushels are likely.

"China's business is really a tide that raises all boats and is very important to North Dakota farmers," explains Marketing Director Jim Peterson. Local cash prices for hard red spring wheat have climbed 30 cents per bushel in the last month, breaking the $4 mark and now settling at about $3.90 a bushel at many elevator locations around the state. He says China's buying activity in the last couple weeks has been a significant reason for the market strength. Looking forward, Peterson expects the opportunity for additional sales to China in the 2004-05 marketing year to lend continued support to the wheat market.

Source: ND Wheat Commission"

What exactly is happening?

At CWB accountability meetings, not one word about sales to China a good prices... WHAT HAPPENED?

Australia is selling almost as much to China... as the US...

[charliep]

Never sure what you want me to say Tom4cwb.

Canada is a supplier, not necessarily preferred, to China. The above has as much to do with politics (both Chinese and US) as it does with wheat.

First, China continues to buy US to straighten out their trade surplus.

Second, pulling wheat for China out of the center of North America makes little sense in terms of freight advantage. Does it make sense to pull wheat out of Manitoba for west coast movement? It may happen sometimes but the real market should be south or east. China has bought hard red winter over out of the Gulf (wheat for noodles, dumplings, etc.) and to me this is the competition. This announcement to me has more to do with US electioning and supporting/getting support from the North Dakota wheat commission than anything to do with wheat.

Actually the positive thing is China has returned to the wheat market with where they buy irrelevant.

[Incognito]

Take a pill first, Tom:

North Dakota Wheat Commission

CHINA'S PURCHASES OF U.S. SPRING WHEAT LARGEST IN 12 YEARS
2/20/2004

For full release:
http://ndwheat.com/in/news/news_detail.asp?ID=262

Excerpt:

"USW recently learned from trade servicing visits with flour mills in China’s southern Guangdong province that DNS wheat with 14.5 percent protein is commanding a premium of USD$0.65 per bushel over competitive Canadian western red spring wheat in local markets."

[wbrower]

Is this 65 cents a bushel because of politics or quality? Maybe the CWB just decided to withdraw from the market place for a while.

Maybe the CWB needs to account for this.

[Incognito]

This info can be used in many ways in the future, wb.

1) where is the premium of the single desk the CWB pontificates? Are multiple sellers extracting this premium from China?

2) where is the dumping that the US so adamantly preaches when the CWB is offering USD 65 cents lower than the USD price?

3) what happened to the "quality controls" that is so costly to maintain and needed to deliver a premium to western Canadian farmers?

Lots of ammo in one small paragraph.

[boone]

incognito: Lots of ammo if they can't deliver, so don't get ahead of them Ace till you can properly spring the trap. But it sure smell like 1972. Why would they go to the market (WTO imbalance aside here), where their involvement has the largest positive reaction on prices worldwide unless they have to, or they have allready bought (robbed) cdn grain? Perhaps they are trying to make a very public commitment to the imbalance, but they have always been shrewd to the 9nth.

[Incognito]

Thats why I like the 100,000 MT floor for reporting sales that the US has, Boone.

And I have a habit of getting ahead of myself - so my wife tells me.

[pillypillsner]

I think china is on chinas side.These guys have taken capitalism to a knew level and are kicking our butts.That being said i have read a few rumours that their banks have some problems with some none preforming loans-anyone else heard anything?

[boone]

incognito: I agree with the disclosure inU.S. it's just naturally healthy. As for getting ahead of yourself,you let her know that's how guys like you and I get the guts to propose! Darn there I go arguing the other sides point again....lol