Trade Changes USMCA

[Klause]

The prediction is that american imports to canada will double under this agreement, to a whopping 100,000 tons. This is no threat.

This will help to ensure elevator prices are the same everywhere and only adjusted for currency. When the CWB existed the price in montana was always higher than just the currency adjustment.

Americans are not going to abandon their world class logistics system to come up here. This is first rate fear mongering.

I'm literally slamming my head into my desk at this.


We will never get direct USD pricing, I believe the big thing was once the CWB was gone, that'd happen.

Instead, we are at a discount to MGEX, have high basis levels and shitty movement.

THE CWB WAS A DISASTER the way it was - no questioning, but this mirage of an open market you think we have is a bigger joke.

Argentine farmers, after their export tax, get paid more for a bushel of wheat than we do... Where's the open market?




Here's the special addendum between Canada/USA on Grain.

Each Party shall accord to originating wheat imported from the territory of the other Party treatment no less favorable than that it accords to like wheat of national origin with respect to the assignment of quality grades, including by ensuring that any measure it adopts or maintains regarding the grading of wheat for quality, whether on a mandatory or voluntary basis, is applied to imported wheat on the basis of the same requirements as domestic wheat.
2. No Party shall require that a country of origin statement be issued on a quality grade certificate for originating wheat imported from the territory of the other Party, recognizing that phytosanitary or customs requirements may require such a statement.
3. At the request of the other Party, the Parties shall discuss issues related to the operation of a domestic grain grading or grain class system, including issues related to the seed regulatory system associated with the operation of any such system, through existing mechanisms. The Parties shall endeavor to share best practices with respect these issues, as appropriate.
4. Canada shall exclude from transport rates that are subject to the Maximum Grain Revenue Entitlement, established under the Canada Transportation Act, or any modification, replacement, or amendment thereof, agricultural goods originating in Canada and shipped via west coast ports for consumption in the United States.
.

[Braveheart]

The language in the agreement for grain looks pretty good to me. It gives the reciprocity needed between US and CA on grades and that had been a trade irritant. I like that they recognized that rail rates for CA grain was an entitlement only for CA grain and not to be used for transshipment of US origin grain.

As far as premiums, buyers and sellers will decide the bids and offers, as has always been, even under the CWB.

I don't see any change to the requirement for CA grain to have an end users certificate going into the US. Not surprising as CA grain shouldn't go to US programs like state mills, PL480, etc.

I live on the border and can tell you there won't be US wheat moving north. None. Klause, you and the NFU can chill.

[walterm]

The language in the agreement for grain looks pretty good to me. It gives the reciprocity needed between US and CA on grades and that had been a trade irritant. I like that they recognized that rail rates for CA grain was an entitlement only for CA grain and not to be used for transshipment of US origin grain.

As far as premiums, buyers and sellers will decide the bids and offers, as has always been, even under the CWB.

I don't see any change to the requirement for CA grain to have an end users certificate going into the US. Not surprising as CA grain shouldn't go to US programs like state mills, PL480, etc.

I live on the border and can tell you there won't be US wheat moving north. None. Klause, you and the NFU can chill.

In CDN $ what would you get for same wheat today on both sides of boarder? Say #1 cwrs 13.5 px in Canada compared to # 1 HRS 13.5 in USA?
Now since we are selling by variety on affidavit what would you get for OSLO which is classed as CWRS in Canada compared to in the USA where it is classed as HRS.

[Klause]

The language in the agreement for grain looks pretty good to me. It gives the reciprocity needed between US and CA on grades and that had been a trade irritant. I like that they recognized that rail rates for CA grain was an entitlement only for CA grain and not to be used for transshipment of US origin grain.

Why are you so eager to make the Americans happy???

America is a competitor not a customer in wheat trade... And at that, a low quality exporter.

An Argentine farmer is getting $8 CAD/Bu for wheat. we are getting $6. We used to be the premium export market.

As far as premiums, buyers and sellers will decide the bids and offers, as has always been, even under the CWB.

I don't think you understand... if we don't have a premium product to export, we may as well stop growing wheat, or get used to breakeven or at cost production... nobody wants glyphosate treated, fusarium infected, or ergot infested product. Especially not the EU and those other "premium" markets we need in order to be profitable.

I don't see any change to the requirement for CA grain to have an end users certificate going into the US. Not surprising as CA grain shouldn't go to US programs like state mills, PL480, etc.

No, and I agree with you on that. It also means that we won't be able to sell "saskatchewan durum" to a foreign customer, because we won't be able to certify that it's Canadian crop (since we can't have that on a declaration).

I also see this as a step backwards... other countries can trace every load of grain back to the field it came from, and we won't be allowed to trace which country it came from??? If it's being used domestically I don't see it as a concern but when selling into export markets - some of which are sensitive to US... "involvement"...

[macdon02]

The USMCA preserves the trilateral nature of NAFTA, which reduces uncertainty in the region.*At least some pent-up investment may be deployed as a result. The deal also reduces risk premium and is therefore supportive of Canadian assets such as CAD. It also clears the way for the Bank of Canada to continue hiking (we expect the next hike in October). USMCA constitutes a win for US president Donald Trump and reduces the risk of escalation of global trade wars, as it provides a path for other trade deals such as an eventual US-China agreement. David Woo believes this agreement could send US rates higher and that it is bullish for cyclical assets.

BOC is essential handcuffed to raising rates in sync with the Fed. This one might be a giant slayer. Get ready for normalized, ie 8-10%

https://www.zerohedge.com/news/2018-10-01/heres-what-inside-trumps-wonderful-trade-deal-canada-and-mexico

Currency manipulation also mentioned. I believe we just blew our head off. The implications to provincial debt levels is astronomical. Obviously there was no consultation with BOC and provinces. This is massive.

https://nationalpost.com/news/politics/andrew-coyne-the-wolf-is-really-at-provinces-door-pbo-fiscal-report-warns

Provincial tax increases and higher interest rates will consume any possible growth we can muster

[PFCanada]

Argentine farmer getting CAD $8/bu?

From the Rosario Board of Trade...

"With a lower offer and a strong demand, prices for 2018/19 wheat to be delivered next harvest (between Dec-18 and Jan-19) at Rosario’s terminal ports climbed to US$ 190/ton, the same value that is currently being offered for the grain to be delivered in July 2018, meaning that exporters are willing to give up any seasonal advantage. "

That's US $190 at terminal...not sure what it costs the grower to get it there. Anyway...$190 x 1.28= CAD $243.20/t or CAD $6.62/bu...and remember that is at Rosario port position, bit interior price.

Why are you so eager to make the Americans happy???

America is a competitor not a customer in wheat trade... And at that, a low quality exporter.

An Argentine farmer is getting $8 CAD/Bu for wheat. we are getting $6. We used to be the premium export market.



I don't think you understand... if we don't have a premium product to export, we may as well stop growing wheat, or get used to breakeven or at cost production... nobody wants glyphosate treated, fusarium infected, or ergot infested product. Especially not the EU and those other "premium" markets we need in order to be profitable.


No, and I agree with you on that. It also means that we won't be able to sell "saskatchewan durum" to a foreign customer, because we won't be able to certify that it's Canadian crop (since we can't have that on a declaration).

I also see this as a step backwards... other countries can trace every load of grain back to the field it came from, and we won't be allowed to trace which country it came from??? If it's being used domestically I don't see it as a concern but when selling into export markets - some of which are sensitive to US... "involvement"...

[Klause]

Argentine farmer getting CAD $8/bu?

From the Rosario Board of Trade...

"With a lower offer and a strong demand, prices for 2018/19 wheat to be delivered next harvest (between Dec-18 and Jan-19) at Rosario’s terminal ports climbed to US$ 190/ton, the same value that is currently being offered for the grain to be delivered in July 2018, meaning that exporters are willing to give up any seasonal advantage. "

That's US $190 at terminal...not sure what it costs the grower to get it there. Anyway...$190 x 1.28= CAD $243.20/t or CAD $6.62/bu...and remember that is at Rosario port position, bit interior price.

Most grain gets shipped direct to Port.

Rosario is the Interior and bids are usually lower than Bahia Blanca for instance.
Also Mills usually provide a premium over export prices (see link below) Argentina converts & exports a large chunk of their wheat as flour.

You're also quoting an article from July.
See this link:

http://www.bolsadecereales.com/descargar-documento5-0/cotizaciones-descargar Daily cash prices at ports/Mills (updated 4PM weekdays)

[wmoebis]

CWRS stands for Canadian Western Red Spring which Canada gaurentees that besides quality it was grown in the area of Canada that included west of the Ontario/Man border including Man, Sask ,Alberta and an area in BC known as the Peace. So can wheat grown out side this area in Canada now be sold as CWRS? Should we now do away with CERS etc.

[SASKFARMER3]

Canada a world power house

[sumdumguy]

Kavanaugh is confirmed. There must be a lot of peed off lefties👍