Durum pricing

[chaffmeister]

Can anyone explain to me how the CWB sets its durum selling prices?

Oct 24......608.77
Oct 27......605.81
Oct 28......594.49
Oct 29......555.77
Oct 30......552.09
Oct 31......527.38

That's <b>down</b> $81.39/tonne in just five days - a $2.22/bu drop.

In the same time, the DTN index for durum <b>rose</b> $25.00/tonne in US dollars and $6.00/tonne in Canadian.

In the same time, the CWB's spring wheat selling price <b>rose</b> $10.15/tonne.

In the same time, the MGEX spring wheat futures <b>rose</b> $0.45 3/4 (US$16.81/tonne).

In the same time, the CBOT wheat futures <b>rose</b> $0.20/bu ($7.35/tonne).

On Oct 23, the Durum PRO <b>dropped</b> $37/tonne (the day just before this major slide). (It's still $177/tonne below the CWB selling price.)

If the CWB has so much control over the durum crop and price, why did they drop their price so much?

[padron]

More sellers than buyers.

[Fransisco]

The Board has had close to 60% of the export market share for the last four years in Durum. Try again.

[TOM4CWB]

Chaffmeister,

If the CWB can actually get over $500/t now... that would be good.

Pardon is right... the economy is soft... 60% of market share right now... after the premium market is already filled... plus the blending that can be done with DNS to make pasta cheaper... means the price MUST come down now.

What other choice is there?

[chaffmeister]

Tom:

CWB price goes down when the rest of the world's price is going up? As "Global Durum Market Dominatrix and Leader", are they trying to lead the market down?

Remember also - the CWB public price I'm quoting is the domestic selling price. No other sellers within Canada. (I'm gonna guess that Padron was being sarcastic.)

As for the CWB getting $500 - I figure this is one of the reasons they dropped the price. Perhaps they weren't selling anything.

Looking at other relevant market indicators, there doesn't seem to be one reason for the CWB to drop their price, let alone that much?


To paraphrase and screw around with a quote by Winston Churchill:

"I cannot forecast to you the action of the CWB. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is CWB corporate interest."

[TOM4CWB]

Chaffmeister,

You forgot the most basic principal.

The CWB HAS NO MONOPOLY in the CDN domestic durum/wheat market... anyone... from any other durum/wheat producing country, can export wheat/durum to any durum/wheat market or consumer in Canada. The CWB in reality has little power to hold up any wheat/durum price anywhere... including inside Canada.

The real question was... did the CWB simply 'realign' prices to better reflect the domestic market reality.

If not... the question is what was actually going on... to cause the changes noted!

The obvious answer is that the 'single desk' of the CWB is powerless to stop prices from decending... inspite the CWB claims or market power.

Simply put... the 'CWB Monopoly' only has power over the grain growers in the 'designated area'... not over the market for durum/wheat/barley.

CWB marketing claims don't hold water... the monopoly is to force a pool price on grain growers to allow the CWB to price lower and price discount without admission or transparent market signals to 'designated area' grain growers!

SIMPLE.

[chaffmeister]

I didn't forget - there are Canadian interests looking at importing malt barley from Europe (it works into Eastern Canada at prices much lower than the CWB is trying to sell - perhaps the same has been threatened on durum.

What good is this marketing agency if it not only doesn't get the high priced sales, but it doesn't get the sales at all?

Well, I guess one thing is you all miss out on the sales equally.....

[Burbert]

Hey Chaff, I got some swamp land in Florida, for sale. You wanna buy it?

[chaffmeister]

No thanks, Burbert.

You wanna buy some durum at $600/tonne?

[TOM4CWB]

Burbert,

Must have got that 'swamp land' from the CWB sales dept... they are sweet talkers to farmers... no doubt about it... they got you convinced!

The bill of goods you have swallowed... would dwarf Moby Dick's capacity to tell a whale of a story!

[furrowtickler]

Come on guys, burbot is just happy to sit and watch CWB prices plummit while the world price edges upwards. As long as everyone suffers the same right burbot?

[Fransisco]

Chaff, I wouldn't pay a penny under $750 right now! LOL

[bucket]

Basically they just throw darts at a number for a selling price. And its under the US price.

If you are really wondering why the price is so low just learn to spell A-L-G-E-R-I-A.

For an organization to control 60% of the world trade in durum and then take 2 million tonnes out of the trade and not control the price they are not very effective. When the acceptance levels are announced that will all make sense to some of us.

To the board supporters - just keep spewing nonsense about how effective the cwb is. And then, once again, try to understand what is written above. For the love of god just try to understand.