Fall pricing wheat

[dfarms11]

Has anyone here priced any wheat or just locked in a basis for fall? hard read was at $10 over and cps at $8 under, are these good levels? Should a guy be locking these in? I've never looked at basis levels on wheat before.

[charliep]

Hopefully I can Lee/some of others to comment as well.

Based on previous years, a CWRS basis of $10 over the converted MGE Dec. futures would be at the weaker end of the scale with a range of $15 to $20/tonne last year. I have had feedback from the CWB that one of the issues in this basis is the impact of the stronger dollar.

The CPS basis of $8/tonne under the converted KCBT Dec. futures is actually not a bad basis relative to history. The one thing to highlight on CPS wheat is spread risk. That is, spreads in total payments are done relative to hard red spring. The relationship between MGE and KCBT can change over time with this impacting the price of CPS wheat/CWRW and the relationship with spring wheat.

Should you be locking in now? I would be more tempted on CPS/CWRW than CWRS. Likely can be somewhat patient on both. I won't exclude signing a fixed price contract either if some of your price targets are hit. Finally, you have the opportunity to lock in the futures side on the CWB producer pricing options (converted to Canadian $/tonne) and let the basis float.