India

[Hopperbin]

From Kevin Hursh's Web site.
If you can't beat 'em, eat 'em
It’s estimated that nearly 50 per cent of India’s grain stocks are eaten by rodents, either in the field or when the crop is being stored in warehouses. According to a report this week by Reuters news service, authorities in Bihar, one of India’s poorest states, are calling on everyone to eat rats. There are even plans to offer rats on restaurant menus. Rat meat is already eaten by some people in India. The Bihar government argues that more people dining on rats will lower human consumption of grain. Plus, there will be fewer rats to eat grain. Cultural differences pertaining to animals and food are amazing. Depending upon your faith, you may not eat pork or you may not eat beef. Most people in North America are turned off by the idea of eating dogs and horses because they’re companion animals. The aversion to rats is because they’re dirty rodents. It is an amazing statistic though that nearly 50 per cent of the grain in India is destroyed by rodents. Makes you wonder why there are so many people who obsess about the amount of grain used to produce biofuels. I’m Kevin Hursh.
I am shocked. I'm Hopper Bin

[skhadenuf]

Hard to believe is an understatement! Also hard to believe eating rat is okey but if our peas etc. are a bit off colour etc. they want it at a discount!

[SASKFARMER3]

Yea a rat is OK to eat but will cancel a load of peas because its not nice. The other news out last night India is in market for 200000 tons of peas oh my god that's a tender of close to 7 million bushels and guess what our price is dropping each day. are we getting the shaft you bet. There is another big rat out their!

[bucket]

Maybe the rats don't like off color peas. Its obvious that if your feeding them that much grain the indian people are watching the rats eating habits.

Its idiotic.

BTW I have heard viagra might not be able to fill a couple of trains at moose jaw. The market will drop the pea price then send it up to look better. Ancient chinese marketing trick. My bins are getting locked. If they call wait a week.

I have found anytime I see walkers number on the phone its only a week or two from a price increase. Somebody is short in the peas.

[mcfarms]

I'm thinking after harvest I am going to go to India to open a chain of KFR outlets anyone want to invest?

And yes I agree when they start to phone it's usually a sign it's going to get better.

[charliep]

Would agree with not selling the first call. Having said, be informed about markets, know a good prices/have a target and sell when achieved.

Just a story from a former life at Growers Marketing Services/UGG a long time ago.

A pleasant morning and the canola trader walks into my office in great distress wondering why farmers weren't selling when they were offering such a good price in the country. Loading a boat in Vancouver and not enough supplies to cover this boat plus the ones arriving over the next few weeks (i.e. short big time and potentially costing the company a lot of money in demurage). They had just gone out that morning with big premium to cover their short in physical supplies. To highlight again, they were very stressed.

Ten minutes later, got a call from a farmer as to why there was such a big premium at UGG elevators. Didn't tell him why (although did drop big hints - conflict of interest). His last comment - "If they are going to pay this big price today, they will pay a lot higher in a couple of weeks when UGG really need it."

About a week later, the UGG canola trader walks into my office with a big smile just like someone who had passed a kidney stone. Totally relaxed/happy. They covered their short plus and UGG was in a very comfortable position to look after their commited sales program.

Ten minutes, a call from a stressed out farmer. Why didn't I tell him to sell? Didn't I know the market was going to drop a buck/bushel?

To highlight again, have your target prices. Review them occassionally to include most recent market information. Sell some (not necessarily all) when targets are achieved.

[bucket]

thanks charliep - lots of insight. They do the same thing today except there is no bumper crop, most farmers bills are paid, demand is surging and prices are not where they should be.

If oil can be justified at 120 plus a barrel then I think 15 dollar wheat,22 for flax, 11 for peas and 18 for canola can all make sense. of course my wife usually thinks I am 80% right so do the math on the above numbers I think there are potetial opportunities at those levels. Any comments.

[charliep]

Ever been invited to a party that you know is
going to end in a brawl with you the main
participant?

Actually no idea. Can comment on what I see N.
to C. Alberta. Conditions have been okay but
recognize late and heat has pushed along over
August.

For the world and now Canada, I can only look at
published information. For Canada, I highlight
today's Statistics Canada report.

http://www.statcan.ca/english/freepub/22-002-
XIE/22-002-XIE2008005.pdf

I can hear the complaining already but everyone
needs to look when the survey was completed and
realize only one piece of the puzzle. My
interpretation is an okay crop but not a disaster.
The real issue and story which hasn't been told is
quality. That will be critical in Canada and have an
impact on international prices - we would likely
disagree on how much.

I go back over what has been said the last two
months and highlight storing I have said grain is
likely a good strategy as an investment. The
reason I would make this recommendation is the
demand side which will use up most if not all the
2008/09 production leaving world carryovers tight
again (you have highlighted) and the need for a
large 2009 crop (will start to play out the what if
scenarios starting early 2009). Also note that
crops are with trading energy markets (highlighted
again yesterday) and you have all the uncertainty
here.

To your question, no idea but there is a probability
that Canada will have an average to slightly above
quality and yield with cooperation mother nature.
The Canadian market has built this scenario into
prices. World markets - Canada is a factor but
again what is our market share in terms of world
trade/production (see Informa Economics study on
wheat and barley)?

[charliep]

On the prices, wheat (I assume 1CWRS
13.5/1CWAD 13) seems pretty high for a target -
just under double the CWB PRO and 50 % higher
than US prices. Flax is likely realistic (with a note
don't follow overly given not much grown Alberta).
Yellow peas and canola are about 10 % above the
new crop market highs - seems a stretch but who
knows. Green peas should see $11/bu.

Again, any farmer that is bullish and has sold
enough crop to pay the bills due this fall can
probably afford to turn off the radio over
harvest/not sell any more grain and re-visit
decisions in October. Comes to risk reward - what
is the risk of lower prices? or Conversely, what is
the opportunity/probability of higher ones?