Husky

[agstar77]

Feed wheat 3.67 for ethanol!!

[LWeber]

northwestterminal.com


ETHANOL WHEAT (CPS, CWRW, CWSWS)


August 5.44


Marketing choice perhaps?

[Burbert]

I thought these dudes were switching over totally to corn, cause it was easier to extract product from it. At $3.67 a bu. for feed wheat, sounds like corn didn't work out! LOL Oh what a tangled web we weave in the market when trying to deceive! Canadian business at its worst?

[TOM4CWB]

Burbert;

The real problem is this:

In western Canada... the CWB has subsidised the value of high px.

When an ethanol plant tries to process high px wheat... it gums up the plant and expensive to get operating correctly with emzimes etc... and the high px wheat is subsidised by the pool and the basis determination by CWB on Fixed Price Contracts.

The CWB is primarily to blame for this problem... don't blame the ethanol plants for an issue that is regulatory, caused by the 'single desk'... and costing all growers huge money in lost gross value and productivity of wheat and barley on our farms. So far the CWB has locked us out of many opportunities... we have lost billions in investment.

Ethanol in the US proves the demand drives higher prices to the grower at the farm gate level.

There are billions more that are being planned to be spent... on value added value chain investments... and 'designated area' grain growers are going to be left out in the dark/cold... if the CWB does not stop distorting our markets in cereals!

[wilagro]

Once more the CWB gets blamed for a decision that HUSKY and HUSKY alone has made.

What is next to blame the CWB for?...high taxes, ulcers, fallen arches, bad teeth, dandruff, BO, drought, frost, insomnia, and on and on.

[charliep]

Actually have to agree with Wilago. The ethanol plants (of which ethanol is one) plus the domestic livestock means the CWB competes in an open market for mid quality wheat supplies (similar to barley). The price competition for CPS from the CWB is PRO (read promise but not guarantee) of $6.90/bu Alberta or a fixed price contract of $7/bu. CWRW is PRO $6.75/bu or a fpc of $7.20/bu (select). Soft white spring wheat is a Alberta PRO of $6.20/bu or a fpc of $6.35/bu.

I assume than in an open market setting (albeit where CWB payment promises/producer pricing option is a contrived price and not a real one), farmers can make a decision of whether to deliver CWB, open market or store.

Before wilagro gets too comfortable and thinks I have gone to the other side, the thing that remains lacking in this open market for mid quality wheat is transpency and prices that reflect actual international values on the CWB side. Otherwise, it is an open market (like feed barley).

[charliep]

I should put in the land US corn price at Lloydminster. Dec corn today $5.90/bu. Basis likely a buck. Track Alberta/Saskatchewan $7/bu ish. Have to convert to $cdn and add cost to get to plant. Without going through the math, landed US corn to an ethanol plant will be well over $300/tonne. Costs are cheaper and ethanol yield higher for corn so this has to be included. SWS is the most competitive (lowest protein/highest starch content).

[furrowtickler]

What are you absolutly gaurenteed from the borg for feed wheat? Minnus the 18 month payment and interest lost on your money and the value on fert costs, herb costs, and the million other things you need to pay cash today - within two months. Just food for thought!

[agstar77]

Yeah, if you wait till oct it's 5.56. Lets help the farmers with their storage.

[charliep]

agstar77

multiple choice question.

I have 100 tonnes of 1 CPS red or CWRW wheat to
market off the combine (October). I need the cash
flow to pay bills. Which one of the following 6
alternatives should I choose.

1) Sell to husky for $5.56/bu.

2) Sell to the local feed market (will make you
shop the market).

3) Sign an "A" series contract and hope to have a
contract call by then. Price into the CWB pool for
initial payment and market other crops to meet
cash needs (yes there is cash advance).

4) Sign an "A" series contract and hope to have a
contract call by then. Price using a fixed price
contract.

5) Leave it in the bin unpriced and use cash
advances, sell other crops or if nothing else tell
creditors they can take a hike until you have made
the decision to sell.

6) Pretend marketing alternatives don't exist and
have no plan to make any decision until October
when you will take the price of the day in one of
the 5 above alternatives.

Question 2

Same decision but with 1CWRS 13.5 protein or
1CWAD 13 protein. Will note that at least 2 of the
above marketing alternatives for these grains don't
exist (feed market, ethanol). I guess could store
but help me understand why not
contracting/signing an "A" series and delivering is
a good strategy with a pooled price that pays the
same Oct. 15, Mar. 15 or July 15.