This peas and lentil thing is upsetting. WTF will farmers grow in 2018. Canola at $8

[sumdumguy]

I think most responsible companies would not have massive shorts or massive longs but will always trade from one side or the other. You can't be long in a falling market. Can't be short in a rising market. No company is ever perfectly hedged but i bet line companies where more of a seller this fall then a buyer. If they do take the risk and are correct they will keep the margin. If they are wrong they will have to eat the loss too. Lenders also have control on this long and short position. It's just not allowed in massive amounts.

Check out the book "Merchants of Grain" if anyone wants some reading on this part of the grain trade. Was some real cowboys in the grain trade years ago.

Will do, thanx.

[sumdumguy]

I think I understand what you are saying Dave about taking long and short positions, but I am pretty sure every time a production contract is signed at the marketer's desk, he takes a position, as in he pre-sells a portion of the specified product. The ptoblem arises when India, Mexico or China can buy lentils from Kazakistan at half the landed price. I'll just leave it at that, let's just guess what happens.

[bucket]

Still are Cowboys in the grain trade....lagging contract fulfilment. ...poor delivery....railways leaving cars sit for weeks....graincos that won't expand facilities to meet railway requirements they knew about decades ago.....

Collusion is celebrated.....

They have a new generation to prey on....

[dave4441]

Yep Farming, it is amazing to see the number of big new plants going up. You would think there is money in processing. Dave, give us the scoop. I have my experience and opinions but it is better to hear it from the new guys.

I think plant based protiens are going to be massive. But also there will be some stumbling. To date we only have a few small players and AGT which i believe is mainly producing in USA which is where the demand is. Is it viable to extract starch and protien in Canada and transport to where the food production is? I am not totally sure.

Klause made a comment on splitting everything in Canada. Transport costs would kill most of this as it doesn't get any cheaper then bulk conventional vessel freight (at least today and last 5 years). Cost is about USD $115/MT from Sask Plant to India by container and USD $85 by boat from Sask Elevator. This is a CAD $1/bushel to grower difference in price and that cost will be there if it is whole seed or processe ingredients in containers. Plus this is an expensive place to split product due to winter and labor costs. Will this type of transport costs matter from Sask to east and west coast USA where population is? It may at some point. I still think that value added will be critical in future but you won't see enough capacity to make a difference on this current price slump. Likely India drought or something happens to change markets before then, but it sure could stabilize the next price slump. Pasta is same. We have known for a long time that producing pasta on prairies is not feasible. This is my long term worry about this move to ingredients in Sask. I am willing to bet a bit financially on it but not betting the farm either.

Saying that we are going to start splitting pulses in fall and would hope to look at ingredients in future. Taking off seed coat is first step.

The James Cameron/Delisle plant is supposed to do 160,000 MT of organic peas in fall. Where they will ever find that amount of organic product i have no idea. I suspect reality is more like 25000 to 40000 MT of product based on the size of the operation. I think all of this will grow more slowly then we would like.

[dave4441]

I think I understand what you are saying Dave about taking long and short positions, but I am pretty sure every time a production contract is signed at the marketer's desk, he takes a position, as in he pre-sells a portion of the specified product. The ptoblem arises when India, Mexico or China can buy lentils from Kazakistan at half the landed price. I'll just leave it at that, let's just guess what happens.

The issue is much of our special crop sales are into destinations that are pretty wonky at best. India will do whatever it can right now to drop it's international trade due to a glut of product. To stop companies in the country from taking advantage of their people and try and be self sufficient. Which is a normal response not to purchase if they can. But, it will create a huge issue down the road for them. They will not be long term self sufficient in all grains.

I was in China at the time of the blackleg issue and i was told what the issue was on canola imports. Basically the govt was bound to buy all the canola from domestic producers but the crushers wanted Canadian product instead because it was better quality so they wouldnt buy the domestic stuff. Govt had 2 or 3 years of purchases from the growers stockpiled so they had to force the crushers to buy it instead of importing even more. Not that sinister when you understand the issue. India is same story.

[bucket]

Dave4441


So the domestic processor or crusher in any country is the problem....starting to make a lot more sense now there cowboy. ....lol.

[Guest]

I agree totally.

I was talking about reds in the fall mainly when i said that. 1500 lb crops at average price of 25 is $375/ac.

$9/bu was available last winter on peas and some was AOG if i remember correctly.

hindsight is good , but the problem with pre pricing around here was a good portion of the crop out , ground saturated , and ruts from one end to the other . we were hoping to seed half our acres last spring . not much incentive to take extra risk . be glad you farm somewhere that you could . having said that I guess we still missed the boat with peas after harvest

[Guest]

hindsight is good , but the problem with pre pricing around here was a good portion of the crop out , ground saturated , and ruts from one end to the other . we were hoping to seed half our acres last spring . not much incentive to take extra risk . be glad you farm somewhere that you could . having said that I guess we still missed the boat with peas after harvest

Maybe some
Maybe some forgot what we were dealt
This is disking pea ground middle of december,the view from combine last november , and seeding near the end of june
Not always easy to pre price. Some forget

[dave4441]

Dave4441


So the domestic processor or crusher in any country is the problem....starting to make a lot more sense now there cowboy. ....lol.

Everyone is going to do what makes them the most money on any given day under any particular circumstances, within reason. Including you and i as farmers or me as a processor.

I sold lentils this year to another processor because i didn't have access to the market for that particular product. I would have had to discount it if i had sold it to our company.

[LEP]

Sheepwheat and Blackpowder. Big thumbs up. ++1.