PRO's

[broker]

I am not pro or anti CWB, but I can't wait to see how guys try to spin today's PRO announcement into negatives!!!!!

[lakenheath]

Durum is still not where it should be. Montana and North Dakota bids are $12.50 per bushel. That is over $12.00 per bushel in my pocket (not including protein premiums).

[cottonpicken]

All i can say is wow!

Anybody want to fess up to there fpc's.

[lakenheath]

I started pricing back in June. At the time they were attractive levels. I was making money at those levels. I have been prices all the way through the rally. You can't look back at all the wheat that you priced or you will go crazy. Right now the PRO is higher than all of my FPC's averaged out on a weighted average, but to PRO is just that. It is an outlook and it can fall as fast as it came up. At least my FPC's are locked in at a price that I made money at.

[charliep]

Very interesting PRO. I won't work through the numbers (willing to do on request) but will note the following.

I find it interesting to compare the dpc to the fpc and from there the PRO. Each class has a different relationship. As note, CWRW and CWSW are close to CWRS (13.5 protein) in the DPC.

Basis levels are interesting. No major changes CWRS/CWWS/CWES. Basis levels on CPS (red and white) as well as CWRW narrowed significantly. Adjustment factors increased slightly.

EPO premiums increased slightly but not nearly as much as the PRO increased. I have to ask as to what changes on PRO days to allow much bigger payments on the one hand but only marginal increases in premiums when compared to the day before. Why don't EPO premium values change on a daily basis in a manner that reflects risk?

October PRO will be interesting. I have a vivid memory of 2002 and would be cash pricing/using early payment options at the time of delivery - same as canola. Get your full value at the time of delivery (or at least 80 % of the last PRO) versus waiting for adjustments, interims and finals.

[just_wondering]

FPC June 22 CPSR $4.44 local delivery 20% if I recall at the time it was at the top 95% of what it had ever traded at before last year sold into industrial market for $4.20
Sept 27CPSR $6.36 another 25% currently at 55% sold with 1000 tonnes of unused DPC room if those that want to sell early delivery options for a profit can, with the CWB's blessing what are 20 tonne allotments of the DPC worth?
Lets start a little auction here, do I hear $500.00?
Was it charlie or lee that called it a lottery?

Side note watch when pricing DPC's in the calculator on the website to add in the $5 tonne basis risk factor that was the difference between FPC and DPC today this is as well as the normal freight elevation, cleaning and the CWB basis all this to get less than world price.

[Fransisco]

Just did my own comparisons and come up with pretty much the same as lakenheath. Yanks are getting a buck to a buck and a half more for their winter wheat and two to three bucks a bushel for their durum.

Wheat board looks good when you compare it to itself, compare it to others, then not so much.

[kamichel]

Hope to continue combining my CWSWS wheat in a couple days. Hope to hold a 2 for my fixed price contracts will be close. If not I get my ass kicked really bad. Lets see if 3 or feed board net to me will get me 60 percent of local feed mill price. Only 40 percent priced.

[SASKFARMER3]

Again don't get excited to much its the CWB. Dropped in pit price in ND is still same as West coast CWB Pro.
Bottineau Bids Basis Cash
Milling Spring Wheat Sep 30, 07 -1.18 7.66
HRW Wheat Sep 30, 07 -1.73 7.46
Milling Durum Sep 30, 07 -199.75 12.75
Terminal Durum #2 HAD Sep 30, 07 0.00 12.15
Terminal Durum #3 HAD Sep 30, 07 0.00 11.65
Terminal Durum #4 HAD Sep 30, 07 0.00 10.65
Oats Sep 30, 07 -0.46 2.10

HRS their still not in the Game.

Also My DPC freight off is $7.11 not $7.66 their still short changing Us by .55 cents a bushel.

[charliep]

No mention of old crop PRO so I will.

Old crop wheat ex durum down an additional $1/tonne. Durum up $4/tonne.

"B" series feed barley up $11/tonne at $209/tonne. Malt barley up $3/tonne. Net result feed barley (all 18,000 tonnes of it) sold for $12/tonne more than Std Select 2 row and $26/tonne move than std select 6 row.

[craig]

While everyone especially board supporters can smile with glee about the PRO's, I would agree with Charlie that PRO's are only an estimate and not reality till the end of the year. What people need to do is look beyond the numbers. What no one is commenting about is the fact that the PRO's have lagged so far behind the PPO's in the last month. What impact has this had on the % of grain sold through the pool accounts vs PPO's. The board may have put themeselves in a predictment. They need enough sales using the pool accounts to balance the lower early sales with later higher price sales. Without a strong PRO they encourage producers to sell using PPO's. I would suggest the CWB has been scrambling all year to react to the implications of a record market. Sadly we can only speculate and some of the reality will not be known till well after the fact( annual report). Will hope the PPO's will not be used to subsidize the pool accounts as we have seen in the past.

[TOM4CWB]

Charlie,

One must ask the question how much cross subsidisation is going on between the FPC people and the CWB Pool.

To have a $20/t premium to get a 100% EPO isn't reassuring either.

What about the $18/t Adjustment CWRS & 21/t 22/t CPS/CWRW factors...? THis is pure cross subsidisation of pool; and a massive cross subsidisation of CWRS by non-CWRS wheat!

Ontario Wheat growers Board should be a good indicator of REAL market signals on these spreads... giving the CWB a quality gift because of the difference between Eastern and Western Canadian grades. $8.65/bu for non-CE(Eastern)RS vs $8.37/bu@ the growers truck... being dropped in the elevator pit.... virtually a farm gate price!

We are very fortunate to have Ontario Board people to show us accurate determinations of REAL market prices/spreads in Canada's domestic market place!

Now... what do we do about the problem?

[northfarmer]

I will see it in my bank account to beleive it.........twice in recent memory, reminded to me by one of my grain buyers, the pro was up singificantly in the fall to only crash by spring to much lower levels, one of these times I remember it conciding with director elections of the CWB.....it is only an estimate, it is being propped by the CWB cross funding from so called cash pricing options, so i will continue to incrementally price my dpc's and use fpc's on hrww....we did notice the all of a sudden lower basis in relation to to HRS from HRWW and did some more on that one...good to see the pros up, but nothing would replace my glee if i had unfettered and complete freedom to market my own production......please free me oh masters!!!!!!!!

[TOM4CWB]

Charlie,

Apples to Apples... the Ontario elevator price tells an interesting story.

Hard Red spring is worth $307/t no protein White and Winter(CPS) is worth $317/t.

The amount of fudge factor in CWB pricing should make any non-CWRS growers blood boil... and being short at the very least our protein premium on cash prices shouldn't impress CWRS growers either!

The CWB has some massive adjustments to make... they have NOT lifted from their deep slumber yet!

[just_wondering]

ignore the part of my post that says add $5.00 I guess it is already figured into the calculator.
Goes to show don't believe everything you read on the Internet

Anybody even board supporters can you tell me why CPS and winter wheat get the huge deductions I realize this is not normally the case of Kansas being over Minni. but WTF