Things to follow this week and strategies

[charliep]

Just to bring the market back into things, what market information will you be following this week and what strategies are likely to come out of it.

Markets have more or less been going sideways for feedgrains and oilseeds over the past month but wheat has been headed lower (beginning of Northern hemisphere harvest).

Down to visit family around Calgary on the weekend and had highlighted the impact of increasing costs. 11-55-0 at $1400/tonne! Ouch.

Finally, will be watching the announcement of the new DPC. Looking for as much details as possible as to how international wheat prices will be included in the calculation. Similar question on grade and protein spreads - I assume still market based versus the FPC initial payment spread based.

[Ron]

Wheat should work lower into winter wheat harvest and recover later? I keep saying that over and over and over and over.
Hope for a rally later and get more aggressive on FPC's after my crop is in the ground.
Is the US really late with the corn crop or just not early for a change?

[charliep]

Ron

Agree with your outlook. Only other thing I would note is using the new and/or improved DPC would be a part of my marketing plan. To highlight again, farmers need to know now with the previous (and last year not met) commitment to have the program available June 1 a bear minimum. The reason I like the DPC program better than the FPC is the use of market based (hopefully) grade and protein spreads versus the FPC which uses initial payment grade and protein spreads (still haven't fixed problems after 7 years). By the way, I am assuming a June/July signup production contract and not available all year - sure would be nice to know.

Theory would be some FPC (hopefully done during the winter) for fall cash flow, some DPC to allow cash pricing (or at least as close as the CWB will let you) during the fall/winter and the remainder in the pooling system.

[rockhound]

Charlie tne DPC will not be good or the CWB would have announced it before seeding. This way it will have less effect on wheat acres.
The DPC will never give you the true value (world price) because of the CWB basis of $2.50/bu. Open market basis is between a $1.10 and $1.30/bu. The middleman (CWB) is sucking up a $1.20 to $1.40/bu for their so called expertise. Forgive me but farmers can`t afford the CWB marketing plans.

[melvill]

Just curious, rockhound. How do you define world price? Is it U.S. Pacific Northwest export of U.S. Gulf export price? Is it a weighted average of all sales of all exporting countries made during a particular calendar year or crop year - given that there are a bunch of different crop years around the world?

[rockhound]

Melvil: You are right, I quess my world price would be better defined as the nearest geographical competitors export price and then basis back to my farm gate.
My point is the CWB has become to costly as indicated by their $2.50/bus basis. They have no risk except from enslaved loud mouth farmers.
Weighted averages are for losers it doesn`t pay the bills. What I mean is no one should be deciding what a profit is on my farm when only I know what that price is. Maybe I can wait for a better open market price like this past winter and every other winter in the past umbteen years.

[rockhound]

Melvil: You are right, I quess my world price would be better defined as the nearest geographical competitors export price and then basis back to my farm gate. That competitive point would be the Pacific Northwest in my case. An open market and a competitive basis would solve this in a moment.
My point is the CWB has become to costly as indicated by their $2.50/bus basis. They have no risk except from enslaved loud mouth farmers.
Weighted averages are for losers it doesn`t pay the bills. What I mean is no one should be deciding what a profit is on my farm when only I know. Maybe I could wait in some cases for a better open market price like this past winter and every other winter in the past umpteen years to meet a profit.
Melvil I`am sick and tired of being sick and tired of CWB power hold on Western Canadian farmers its gone beyond to much cost and is now about freedom.
Question Melvil; and its just a question Joe Dales. Does freedom always require violence? Where is Louie Riel when you need him. Oh right they hung him!!!