What would average Kansas farmer have for a basis on wheat?

[poorboy]

We all get off bashing the CWB because of our comparisons of what we get to the US futures. I am wondering what a winter wheat grower in Kansas or a spring wheat grower in North Dakota would have as a basis to the futures? I am sure that they are not getting paid on par to the futures. Once we know these numbers then we can better compare the price we get to the other side of the fence.

[charliep]

A site for western Kansas elevator prices is located at:

http://www.ams.usda.gov/mnreports/DC_GR110.txt

Prices for US wheat at other locations is located at:

http://www.ams.usda.gov/LSMNpubs/Grain.htm

A note is these are cash prices and not a basis. Yesterdays December Kansas City board of trade close was $3.72. That puts the basis in this region at about 30 cents/bu.

Does anyone have any other good sites for US wheat prices.

[charliep]

Don't know how this will look but will try to paste in Montana prices (located at http://www.ams.usda.gov/mnreports/BL_GR110.txt)

BL_GR110
Billings, MT Wed Oct 29, 2003 USDA.Market News

Montana Grain Report

Closing elevator bids: Compared to Tuesday, Winter Wheat was steady to 2 cents
lower; Spring Wheat 3 to 5 higher; Durum Wheat, Malt Barley and Oats
steady; Feed Barley steady to 10 higher. Wheat prices are in dollars per
bushel.

*Montana cash prices*
US 1 Hard Red Winter Wheat US 1 Durum
Ordinary 11 pct 12 pct 13 pct Wheat
Billings Area 3.26-3.45 3.26-3.48 3.35-3.53 3.43-3.64
Golden Triangle 3.32-3.39 3.39-3.40 3.47-3.51 3.54-3.59 3.80-3.85
Great Falls Area 3.32-3.48 3.32-3.50 3.40-3.62 3.52-3.62 3.80
Northcentral Mt 3.37-3.48 3.38-3.53 3.38-3.55 3.49-3.59
Northeast Mt 3.01-3.11 3.09-3.18 3.16-3.23 3.20-3.32 3.55-3.75
Southeast Mt 2.85-3.15 2.85-3.22 3.00-3.27 3.10-3.32

US 1 Dark Northern Spring Wheat US 1 Soft White
13 pct 14 pct 15 pct Wheat
Billings Area 3.57-3.75 3.65-3.87 3.69-3.95
Golden Triangle 3.74-3.76 3.82-3.84 3.86-3.88
Great Falls Area 3.70-3.82 3.78-3.89 3.82-3.92
Northcentral Mt 3.67-3.80 3.77-3.88 3.81-3.92
Northeast Mt 3.39-3.53 3.47-3.61 3.51-3.70
Southeast Mt 3.30-3.54 3.42-3.62 3.46-3.66
Southwest Mt 4.04 4.16 4.34

US 1 Malt Barley US 2 Feed US 2
Harr/cwt Barley/cwt Oats/cwt
Billings Area na na
Golden Triangle 5.75-6.25 4.15-4.30
Great Falls Area 5.75 4.10-4.50
Northcentral Mt 6.00 4.00
Northeast Mt 5.50 3.75-3.85 4.68
Southeast Mt 3.85
Southwest Mt 4.90

*Prices not necessarily representative of all terminals within MT.

Source: USDA Market News Service, Billings, MT 406-657-6285.
24 hour price information 406-657-6400
www.ams.usda.gov/mncs/mn_reports/BL_GR110.txt

1425m mjh

[charliep]

Poorboy, I farm in Alberta and as you see Montana cash price for HRS wheat is around that $3.80/bus US. The MSE future for Dec. 3 is $3.79/bus US. This appears to be a 0 basis.

The cash price of $3.80 converts to about $5.00 Canadian. The CWB pro at $l95/mmt (for #1 CWRS 13.5% protein which is deemed to be the same as #1 Dark Northern Spring Wheat 14% protein) less $45/mmt basis equals $150/mmt which converts to a farmgate price of $4.08/bus Canadian. This is a 90 cent differents.

But I think charliep is right in kansas on winter wheat it appears to be about a 30 cent/bus basis.

Canadian wheat Board Basis from my delivery point is $45.00/mmt or about a $1.20/bu.

I stand to be corrected but these figures done lie. I feel that the way we and some other countries in the world market wheat is very obsolete.

Most of are wheat is sold outside of the world price discovery process so god only knows if their is a surplus or a shortage. The Canadian government is going to maintain the CWB as is and market grain in the same manner to the keep the price and the supply in the order that suits them and do it all on the backs of farmers.

Farmers suffer the low prices because of the governments marketing stance and we also store government supply quarantee at no charge.

The open market would cure our price problem because I believe that the Cash price in the US would tranfer to our market immediately. The process of bidding for supply of wheat in these days of shortages would cure our poor prices and would restore risk management back to the farmer. The government could forget about subsidies and turn their attention to how to maintain food security at a cost to all taxpayers.

[bobn]

Using the posted cash prices for the Berthold Farmers Elevator located near the Sk-Man border in ND I have put together a comparison of some of our Canadian grains. For the CWB EPO I used 80% of the PRO less $7/t for risk. I'm not positive of these EPO figures as they are difficult to find on the CWB site.



SW = Spring Wheat
DU = Durum
FB = Feed Barley
MB = Malt Barley
FL = Flax
FP = Field Peas
OA = Oats

US$ Can CWB Pro/ EPO
Cash Equiv Can 80%
Price Cash PRO-
$3.37 $4.41 $4.01 $3.01SW
$3.80 $4.98 $4.36 $3.29DU
$1.90 $2.49 $2.02 $1.40FB
$2.10 $2.75 $2.71 $1.97MB
$6.00 $7.86 $7.27 FL
$3.50 $4.59 $4.80 FP
$1.00 $1.31 $2.04 OA

Source:
Berthold Farmers Elevator
http://www.bertholdfarmers.com/

http://www.statpub.com/stat/prices/spotbid.html

http://www.cwb.ca/db/contracts/pool_return/pro.nsf/WebPRPub/2003_20031023.html

[les]

charliep
Where do you see canola prices going?

[charliep]

Les

An honest answer on the canola question would be no. Soybeans keeps getting propelled higher by a massive Chinese buying program - even more than they have port and shipping capacity. How long will this continue? Argentina and Brazil are either seeding or making seeding decisions as we speak - $8/bu soybeans means more acres/inputs. Having said this, it is hard to stand in front of a freight train of a market that appears headed higher.

At the same time, soybean oil (will have to see today) seems to have stalled out. I also like to look at long term charts (http://futures.tradingcharts.com/chart/SO/M). 27 cent soybean oil is expensive. Can this be maintained? Again China has been a massive buyer of palm. Will they continue?

Finally canola. Ugly basis with some comments from some that there are starting to be a few premiums offered.

Bottom line. I am a seller with an objective in the back of my mind to be 50 to 75 % sold depending on cash situation (nothing wrong with being 100 %). I would be doing DDC pricing into the winter to try to get narrower basis. If I couldn't find a basis I am willing to live with, I would sell futures - I think anything over $390 is okay. $395 would be my target for at least some. $400 - maybe. My experience even numbers like this are tough in that either wrong (never makes it there) or it blows threw to go higher. Which one this time? Don't know.

[poorboy]

Thanks for the input. I was always comparing the futures to the return on my farm and I got to thinking that maybe US farmers were getting way less than the futures in their pocket. But no, we seem to be getting the short end of the stick like usual.

[charliep]

On the canola question, much more nervous now than I was this morning. Monday will be an interesting day.

It is one of those times when anyone who has sold and has cashflow needs covered can sit back and relax. Anyone who is in a forced sell before the new year has challenges ahead.