Do the CWB Pool Return Outlooks Serve a Purpose

[charliep]

Now I have your attention, I will point out that the September version has been released today (Setp. 25). The major change was a decline in hard red spring wheat/tightening of spreads with mid grades. Durum prices where up with lower grades (excluding 5CWAD). My guess most classes was just a currency adjustment.

Back to my question. Does the PRO process provide farmers with usefull information for management decision making?

[cowman]

Yes Charlie the Pro does serve a purpose, it shows us how badly we do with the CWB as compared to open market cash prices. Hence my monthly summonary of prices.

Sept. #1 CWRS 13.5 protein CWB Pro dwn $5.00 at $196.00 minus $45.00 to port, gate price $4.10

US #1 Dark Northern Montana cash
price $5.04 delivered North Central Montana.

$0.96 cent different per bushel of wheat

CWB SS Barley Pro $3.27

Montana 2 row Harrington cash price $4.20

$0.93 cents a bus. for barley

CWB asking price at Port for #1 CWRS is Sept 24 $217 or $4.72/ bus.

Aug. asking at port was $248 or $5.57.

In my opinion the $31.00 drop in the asking price is the result of the the way the CWB markets our conficated grain. As of the 1st of sept. they having some knowledge of the grade of wheat we have they have entered the market to sell it in a big way thus driving the price down. As all grain buyers in the world are lined up for the CWB give away program, no one is actively bidding for supply in the open market thus the price goes down.

The CWB marketing team in all their wisdom don't realize that by the very way that they market it weighs heavily on the price because no one is bidding at their fire sale or as the American call it, dumping on the world market.

The CWB is not a commercial seller of wheat and barley. A good example of what I'am trying to say is, Last summer when the CWB removed itself from the market the price of wheat went up a $1.00 bus on the open market. Why because buyers had to bid for supply on the open market there for driving prices up. The CWB is the worsed case sunnero of putting all your eggs in one basket. You are continuely getting your butt kicked in this marketing system and it not only hurts Western Canadian farmers but hurts every farmer in the world. It could be a big cause of some world subsides on grains.

And before someone mentions that is cost more than a $1.00 to get it to Montana, I will say that if we had an open market in Western Canadian that Cash price in Montana would duplicate itself to are market in a minutes time.

Therefore we must establish our own commodity market for milling wheat and select barley.

Please do comment.

[TOM4CWB]

Kernel;

RIGHT ON THE MONEY!

If you were to look closely at the cost to get Montana wheat to Port position, you would find that it costs more in Montana than in Alberta for freight by 30-40%. Our CDN cleaning and tookage charges bring it back a little closer, but it is about a cost of $1.30/bu for Montana growers, vs $1.10/bu for Alberta growers.

Until the CWB has some true competition, or a true threat of dissolution, we will not have a daily cash market which is KEY to grower dicipline of CDN wheat sales on the international market.

When the price gets low, designated area growers MUST tell the CWB to stop selling by refusing to offer cash grain for sale, just as happens in the Canola market today.

If the CWB converesly were in charge of selling Canola through a pool only system, we would have an initial probably under $200/t, and a PRO of $300/t in Alberta, instead of a cash price today of $335/t. Grower dicipline keeps our Canola market up, even though we are only 2% of the world oilseed market, ****seed being 10% in 2003 of the total world oilseed market.

http://www.agdayta.com/AgDayta/madx?u=VCAAD0232201075&ltype=newsList&page=Market News&id=702&pgNo=0 "World ****seed Trends" 09/23/03 article.

WE (CWB Designated Area Growers) MUST Stop knocking the bottom out of the wheat market, as we are only cutting our own throats!

[rain]

kernal where did you get the harrington price from Montana Alot of montana and oregon prices are 100 weights and and different bushel volume.

[charliep]

A Montana Harrington price is currently in the $6 to $6.25/CWT range or US $3/bu. In Canadian terms, Cdn $4/bu (approximately) or $185/t.

Information can be found at:

http://www.ams.usda.gov/mnreports/BL_GR110.txt

the Alberta Grain Commission also posts malt barley prices.

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agc7137?opendocument

[sshiels]

I am wondering why producers would be willing to sell CWB feed barley based on the PRO? Last year the CWRW, CPS, and CWES PRO's were high in the fall to keep the wheat for the board, then, after Oct 31 and the A series deadline, every PRO lower. I can see the same thing developing in the barley market as the CWB sold the barley on spec and now needs to buy it all at any cost. Would really appreciate all your thoughts.

[rain]

Any grains sold this year to CWB should be done with the EPO. If you didn't don't cry next year whenand if the final prices are well under the current PRO values.

[melvill]

Looking for more details on the CWB Early Payment Option, point your web browser to:

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/sis7424?opendocument

Let me know what you think?

And yes, I agree, all wheat sales to the CWB, except maybe durum, should be made with AT LEAST the 80% level of the EPO.

[sshiels]

Even on the EPO, at least in eastern Sask, you are 30-40 cents behind the feed market. That seems like an awful lot of risk to be taking with the board.

[rain]

sshiel: what type of wheat are you talking about in eatern Sask? CPSR or HRSW?

[rain]

Rain and Melville, I know all about the EPO and 80 or 90% of a bad price is still a bad price. Pooling is for niche markets in very small amounts. For example the durum wheat market of which Canada has over 50% of the World exportable supply can hold the worlds buyers to ransom to guarnatee their supply. Very simple and I don't debate that the CWB can extract a premium for durum when they hold the supply but I also argue that a growers could do the same thing in an open market. At present if the CWB doesn't like the durum world price they stop selling and buying and the farmer gets hurt because they can't make a marketing move on their own.

With CWRS the CWB admits itself that they only get an average price for 50% of the sales they make on behalf of farmers and the other 50% is sold for less than average price. That leaves the farmer with a worst than average price for CWRS.

In the fall and winter of 2002, a farmer could have priced his CWRS milling wheat at $8 to $9/bus. on the open market if we had one. With the CWB we are going to settle with a maxium price of under $6.00/bus. Even with last years very poor crop my farm lost nearly $30,000 on wheat marketing thru the CWB. This year its looking like a $80,000 lost on wheat thanks to a over bearing monopoly seller that belongs in some undemocratic country where people can vote away other peoples rights.

The CWB can not act quick enought to the market in most cases
because they lack the information needed such as quality and quanitity. The Grower knows this information. Marketing is all about timing and information and CWB has neither.

Farming is a business and laws should not be made to make good business men support poor business men who refuse to market or don,t know how to market their product. They should be working for a wage and have someone wiping their noses.

Does this sound passionate enought to expose where I stand on this issue.

[rain]

kernal I hear you. I in no way support the CWB but we must learn to make the best of a bad situation and some the contrats, if worked properly do that. I see no reason for a CWB. All I am saying is EPO, Flat Prices and Basis contracts are better then what we used to have.

[rain]

Rain I think I knew what you mend. It just gave me another chance to continue my rant on the CWB.

[sshiels]

rain: sorry, I was comparing CWB bly and the feed barley market, not wheat. Last year was the wheat fiasco.