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

[wmoebis]

Everyone talks about signing good prices for grain they don't have ...let's say this drought took hold this past year and you were holding a 9 dollar pea contract with no crop and the price went to 15....


Or you had a 9 dollar contract and the price drops and the grain cos won't take delivery.....


Net result is shit rolls downhill...farmers have zero people in their corner....zero...

Bombardier....AGT. ...manufacturers. ...all have government backing.....

We have nothing....

I don't understand markets so help me. If there was $9 markets why didn't grain Co pre sell the whole crop and be able to offer that price all the way through. That seems to be the recomendation all experts are telling farmers they should have done. Same with wheat back in July.

[agstar77]

Maybe it will bring some reality to land values. All I have heard over the last number of years is how much growers have made on lentils. Well nothing lasts forever.

[bucket]

Wmoebis

Grain cos would never take that position....they can't afford it that's why they lay the risk onto primary producers....they can hold farmers hostage for their grain needs...

[sumdumguy]

I don't understand markets so help me. If there was $9 markets why didn't grain Co pre sell the whole crop and be able to offer that price all the way through. That seems to be the recomendation all experts are telling farmers they should have done. Same with wheat back in July.

How do you know that they didn't hedge this crop? Maybe they did but the profits aren't our profits.

[macdon02]

Because if they are wrong wmoebis, they are done. It's the difference between speculating and hedging. So they simply offset the producers sales with futures contract. We don't want them going broke as much as we might wish some days .... The office is dealing with currency, basis and their actual sale as different pricing components. So there's still opportunity to get blitzed. Especially if they make fwd sales on say something like 14 pro back in July. As soon as the sale gets made on their end the hedge is lifted..... So they better have some ****ing 14 or they need to flush it out with premiums or discounts. I suspect by Feb or march they'll start paying for 14 pro as a "premium" because they'll have no other choice but take the gas.

[bucket]

Because if they are wrong wmoebis, they are done. It's the difference between speculating and hedging. So they simply offset the producers sales with futures contract. We don't want them going broke as much as we might wish some days .... The office is dealing with currency, basis and their actual sale as different pricing components. So there's still opportunity to get blitzed. Especially if they make fwd sales on say something like 14 pro back in July. As soon as the sale gets made on their end the hedge is lifted..... So they better have some ****ing 14 or they need to flush it out with premiums or discounts. I suspect by Feb or march they'll start paying for 14 pro as a "premium" because they'll have no other choice but take the gas.

Your first sentence is why many farmers don't sign forward contracts as well....

No futures for peas lentils flax wheat durum mustard in Canada. ...where would the grain cos lay off that risk? To the primary producer by controlling delivery.....

[bigzee]

“I’m locking the bins”. Likely the most used phrase in the farming industry. Have a neighbour who didn’t sell any reds from 16, he told me that exact line. After this crop he reiterated the exact words. Then he asked me what I would do. Firstly, I told him locking the bin does nothing but create more problems down the road. I said reds will drop to the teens, he laughed and said never.
He asked me what I’m going to do? Told him I made the best move all yr, sold all reds at .30 switched to small greens. Hey he asked for my opinion.
Then recently a good friend advised me to sell all remaining small greens, took his advice now they are down to .28
No things aren’t looking good good! It’s all production, and that’s the problem. But I agree it’s going to be hard to decide which crops are going to make a viable return.

[farming101]

Well if they did hedge it is not evident or they didn't do near enough.

I would imagine most hedging would be foreign exchange risk related

[bucket]

How do you hedge against an arbitrary closure of a market by imposing an import tax on grain in transport.....

[dave4441]

I don't understand markets so help me. If there was $9 markets why didn't grain Co pre sell the whole crop and be able to offer that price all the way through. That seems to be the recomendation all experts are telling farmers they should have done. Same with wheat back in July.

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.