White Hot Grains!

[TOM4CWB]

Charlie;

How high can it go!

Today...

Mini $4.50/bu Dec 04
CBOT $4.37/bu Dec 04
KCBT $4.38/bu Dec 04

CDN $ @1.3383 CEC Dec 04

This should mean a #1CWRS 13.5 CWB Port price of over $6.50/bu ($238/t), with an average CWB long term basis.



CBOT Corn $3.17/bu Dec 04... there is no excuse for the CWB PRO's to do anything but increase on wheat, malt and feed barley... this week.

Unless they sold at cheap prices.... for 2 straight years in a row!

[TOM4CWB]

THe CWB $11.47/t basis is a real stinker today... @$232/t the CWB is taking lots of protection...

[Braveheart]

Tom, the big question is not what the PRO's should do, but what is the best way to take advantage of this rally to take some protection for this year's crop.

We have winter wheat in the ground (we will grow no spring wheat) and using the CWB Fixed Price Contract, we can get $4.14 per bushel for new crop winter wheat in southern MB. Despite higher fertilizer costs, given average yield, that price gives a decent return on investment.

However, all technical indicators seem to say this market (KCBT) has an intact upward trend. In your and others experience, is Kansas City a trending market? Should a producer start being a scale up seller at these prices? What fundamentals are driving this? Should events overnight in Israel/Gaza concern us re wheat fundamentals?

Regards,

Braveheart

[AdamSmith]

Braveheart;

The domestic market must now enter the fixed price contracts into the equation. I still lean toward the domestic market for winter wheat. A FPC will address price, but the delivery process still remains the same as pooling. Is the CWB offering 100% call for harvest delivery?

Today's market environment in western Canada has the open domestic feed market being a lagger on price not a leader.

Today Minny wheat was up $.35/bu Cdn.
Winnipeg wheat was up $.09/bu Cdn.

Corn was up $.09/bu Cdn.
Barley was up $.03/bu Cdn.


Canadian grain SHOULD keep pace with world prices BUT we have a VERY SERIOUS price discovery problem here in western Canada.

Can you say ARBITRAGE

I suspect feed grain prices will catch up to real world prices but when that happens is the big question.

[TOM4CWB]

Braveheart and Adam;

After doing the CWRW Select CWB program, I would NEVER sell wheat this way AGAIN.

CGC grading in our area changed between August and January... normal 80% HVK in CWRS... turned out to be 30% HVK in our winter wheat.

I took our samples and had them regraded... they were using durum HVK standards on our CWRW.

WE are SICK... with $3.20/bu CWB return after doing all the extra work. Six months earlier we got $3.70/bu off the combine as feed wheat.

Further unless the CWB changes the basis on winter wheat... it will go out of here (the west) as CWRS anyway, blended in.

[TOM4CWB]

Guys;

I see No. 1 CWSWS, Mar 21, 2004 is at $223.70/t FPC.

For the CWB to discount CWRW (negative $20.50/t)and CPS Red (negative $15.20/t) VS CWSWS (positive $9.48/t) they have shown incredible favoritism to Soft White freinds in southern Alberta. With the 14% duty on CPS and CWSWS, VS none on CWRW... this is beyond belief how the CWB can justify this for a milisecond.

[charliep]

Noted your question on whether this is an upward trading market. Thought I would post the chart and give my two bits worth.

http://customer1.barchart.com/custom/kcbt/3241.htm

Terms always confuse me but I to now wheat has been more of a trading range market that is moving higher. $3.60 to $3.90/bu from Oct. to Dec. and then $3.85 to $4.10/bu Jan to Mar. What we know is that the market firmly broke out of the range today. Don't know how much higher this market will go. What I will be looking for is how far it breaks on the way down with the assumption it should find support again at $4.10/bu.

What are others seeing in the charts?

[crusher]

CHARTS

I see resistance right now in barley - others might have seen it too with the poor close. I'm going to be a seller tomorrow. I haven't looked at WCE wheat at all, and it always get we in trouble when I do.

Minneapolis wheat in upward channel with resistance at 4.60 on weekly. Previous recent high on Dec daily at $4.50. The Canadian $$ closed in the upper end of 73 - 75 range. It hit some of my targets, I'm selling tonight with another target 10 cents higher.

KC wheat blew through top of channel (4.27) closing at 4.38. I'm selling some of this too. Third leg extension on weekly chart at 4.48 to 4.57 (nearby) so there is still a little room to go yet.

[charliep]

Interesting how the wheat market floated back today after yesterday's rally. Interesting to see how the market behaves.

Wheat is the least fundamentally positive outlook of all the crops with North hemisphere winter wheat harvest right around the corner/crops in reasonable shape. Next pieces of fundamental information will be acreage/impact of weather on spring crops. Next set of factors will be the demand side with China the wild card.

[Incognito]

I disagree with your wheat analysis.

Lowest stocks to use ratio's since 1989....close to 1967 levels

In KS, 19% of the wheat could be abandoned for corn and soy acres.

Corn needs record yields, not trend line yields to assume 2004/05 carryover that the USDA is projecting and will impact wheat prices and we got a taste of that yesterday.

Quote:

Canberra, March 23 (Dow Jones)World wheat prices will be well supported in the coming months, David Johnson, who manages the collective sales pool of Australia's wheat export monopoly AWB Ltd. (AWB.AU), said Tuesday.

"With world (wheat) stocks at such tight levels, there's very little margin for any production problems anywhere in the world, so we expect wheat prices to be very well supported for the next four to five months," he said in an interview on Australian Broadcasting Corp.'s Country Hour radio program.

"There doesn't appear to be any major fundamental change" in the wheat market, he said.

The strong fundamentals for soybeans are spilling into corn, with the sentiment in these two markets then flowing into wheat, he said.

The progress of and production from the U.S. corn crop will be "absolutely critical" for wheat prices, he said.

The attention of the wheat market is also focused on northern hemisphere production and how crops in the U.S., E.U. and Russia are coming out of dormancy, he said.

"At this point in time, things are looking pretty good," he said.


Unquote

I read much more positive in his statements than negative.

You've been attending too many CWB meetings...

[charliep]

Actually I am optimistic on wheat but it is more a matter of when kicks in. In my opinion, wheat has some challenges to move substantially higher over the spring unless carried for a ride by beans/corn. Summer/next winter is different with the tight supply/demand you talk about critical. Also a highlight that I/others have been optimistic about wheat prices only to be disappointed. It is interesting to look a the growth in oilseed and oilseed product demand versus something pretty flat for wheat with declining per capita consumption offsetting population growth. China is the wild card.