CWB feed wheat prices

[TOM4CWB]

Charlie;

I was looking at AWB pool returns at:

http://www.awb.com.au/AWBL/Launch/

I see the Canadian vs Australian currencies are almost equal;
Mar 04 CDN @ .7694 vs. Mar 04 AUS @ .7455

Now I see AWB pool returns much higher than CWB, especially feed wheat, in all pools the AWB offers Ausie farmers.


“Minor changes to National Pool estimates ( 22/12/2003)


(AWB) Estimated Pool Returns (EPRs) remain unchanged for all major milling grades for AWB National Pool this week.
For the new season 2003 AWB National Pool, benchmark APW remains at $221/t (FOB, GST exclusive), with APH $240.50/t, APDR at $262/t and ASWN at $236/t.
However, changes have been made for 2003 Feed, FUW and GUW pay grades, each of which have been increased by $5 per tonne, taking Feed to $190/t.
There has been no change to EPRs for the 2002 AWB National Pool.”


Why are CWB feed wheat prices so low vs AWB, and for so many pool years?

02-03 CWB Feed wheat price was $128.50Cdn
vs.
AWB EPR for pool 1 2002 of $230Au

03-04 CWB Feed wheat price EPR was $133.00Cdn
vs.
AWB EPR for 2003 of $190Au

[charliep]

You will have to ask this question of the CWB. Of more concern is the relationship between feed wheat and feed barley. Feed wheat is $133/t while feed barley is $159/t (both port prices). As a note, 1 CPS wheat is $172/t tonne, less than the Aussie feed wheat price.

I checked out corn prices (see http://www.ams.usda.gov/mnreports/SJ_GR850.txt). US corn at the Gulf is about US $2.80/bu or about Cdn $145/tonne. US corn prices at Portland are about US $6.00/CWT (US $3.30/bu) or Cdn $171/tonne.

Given Alberta feed wheat prices are currently competive with the CPS pro (see http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agc5474), the question on feed wheat is a mute point. Even with the boost in the December PRO, the domestic feed market is a better sale opportunity for mid quality classes wheats and lower in today's market.

What is more important is the spreads used in the PPO calculations. Anyone who signs up for a fixed price contract early and gets feed/applies this grade to the contract gets screwed (with appologies for inappropriate language). This is a major problem in the current contracting system.

[TOM4CWB]

Charlie;

I see WCE nearby Feed Wheat @ $140/t and Bly at $134.90/t with Dec both @ $145/t. Since these are interior prices, any claim that the CWB correctly reports and pays fair spreads cannot be accurate.

On AWB high quality wheat (APH (13% protein 5% screenings 12.5% moisture))
, the AWB 2002 pool #1 pays $290/t... and the CWB paid $247.74, minus $25/t from the feds kicking in the deficit payment, PLUS the interest earnings... we are down to $230/t on equivelent type of wheat.

And we are supposed to believe the CWB are superstar marketers?