Line companies canceling ships ?

[Sodbuster]

No matter how you cut it, roll or buyout your contract the producer will be responsible for the difference between the futures month and contracted price. What ever fees or penalties will be added on top of that, not many other options if your contract is tied to the futures market.

Barley contracts could be interesting, far as I know I don’t think that they are tied to futures.

[Old Cowzilla]

Heard one elevator saying they don’t care what crop insurance says. They still want their bushels on act of god contracts. Could get interesting....

You wouldn't think a act of god contract was worth the paper it was written on if that was the case or ? I think a lot decisions won't be made till after combines get rolling across all of western Canada.

[ajl]

Contract buyout involves futures change plus basis change and a penalty to compensate for the amount that the elevator makes from the handle which they will not get if the bushels are not there. Have bought out some contract already since the bushels will not be there. Poor crop last year due to flooding and now a poor on due to drought this year. Rain forecast all week for around here is a bust so far.

[furrowtickler]

Contract buyout involves futures change plus basis change and a penalty to compensate for the amount that the elevator makes from the handle which they will not get if the bushels are not there. Have bought out some contract already since the bushels will not be there. Poor crop last year due to flooding and now a poor on due to drought this year. Rain forecast all week for around here is a bust so far.

We are in exact same situation here , many are.
We bought out some CPS , money we can’t afford to literally give away but it is what it is .
Hopefully we can cover the balance.
Majority of farms will have little to none to sell into these high markets
But we will all pay like every kernel is at record prices.
A perfect storm of worst case scenario anyone could imagine in grain farming .
Livestock producers will be in as bad shape or worse .

[helmsdale]

You wouldn't think a act of god contract was worth the paper it was written on if that was the case or ? I think a lot decisions won't be made till after combines get rolling across all of western Canada.

I can sort of see where this's coming from... crop insurance says "it's a write-off" when theres less than, let's say 10bu/ac. If theres actually 10bu/ac there and a grower decides to wrap it, silage it, graze it etc, that shortage to the buyer really isnt an act of god but a deliberate decision.

[furrowtickler]

I can sort of see where this's coming from... crop insurance says "it's a write-off" when theres less than, let's say 10bu/ac. If theres actually 10bu/ac there and a grower decides to wrap it, silage it, graze it etc, that shortage to the buyer really isnt an act of god but a deliberate decision.

Definitely going to cause some contention with grain buyers . On a normal year this probably not an issue , but this year it’s a huge issue when there will not be enough grain to fill commitments on either side in such a huge area

[WiltonRanch]

What year was it when Britain bought most of Canada’s wheat on the Winnipeg exchange for the war effort? Rust shwacked it and all all but a few grain buyers went broke. Most obviously were naked short and market wiped them out. You’d think they wouldn’t be that foolish today. Even so when and how does force major kick in or who underwrites policies for these events? Can’t see the families being foolish.

[sumdumguy]

They say there is insurance to cover every peril. But who knows? We saw lots of special crops companies fold after their shorts hit the fan. Forward selling is not a game for the faint of heart.

[WiltonRanch]

Is was it common practice when you deliver a load to the elevator they take a futures position for that load? Not for speculation but to cover risk like the end user takes the other side to cover their risk as well? Then the speculators are there to gamble and raise hell?

All said if sales contracts can’t be filled we know mr farmer is on the hook but has the buyer taken out a long position on that contract if they foresee it going up (speculation) or did they go short? Untraded goods like barley has to be a tricky one as corn is the next closest thing and it hasn’t probably has the same path.

[ajl]

I can sort of see where this's coming from... crop insurance says "it's a write-off" when theres less than, let's say 10bu/ac. If theres actually 10bu/ac there and a grower decides to wrap it, silage it, graze it etc, that shortage to the buyer really isnt an act of god but a deliberate decision.

Crop insurance never "writes off" a crop. They assess a yield and then release the acres if they can come out on time. My peas were flooded out last year and areas were getting weedy. When crop insurance came out 2 weeks later we assessed a yield of 2 bu/ac on a third of the acres in the field. These acres were sprayed and worked down. When it was time to figure the shortfall 2bu/ac on the affected acres was added to production and the shortfall calculated accordingly. These days they are already months behind.