"Contract squeeze worries farmers " is the WP headline

[AlbertaFarmer5]

risk is a factor I know Cargills cheque is more likely to cash than some brokers or feedlots out there

Bingo again.

And that is because Cargill is not speculating on the grain you sold them, whereas the feedlot could be open to unlimited risk and loss if they don't also have the cattle price and grain price locked in. Although most modern feedlots also hedge everything when possible.

[farmboy44]

Why can't you wait until the grain is in the bin to sign a contract that you know you can deliver on?

Why are so many farmers so eager to sell into what historically is the lowest markets of the year?

Winters are for Mexico, spring is for seeding, summers are for the lake.

But really.. Cash flow, bills due, bin space.

[farmboy44]

Bingo again.

And that is because Cargill is not speculating on the grain you sold them, whereas the feedlot could be open to unlimited risk and loss if they don't also have the cattle price and grain price locked in. Although most modern feedlots also hedge everything when possible.

it’s a shame that whether or not the guy who is paying us is going to be good for it has to be such a factor in marketing


But by that measure; the graincos could say it’s a shame that the whether or not the guy who is supplying the grain is going to be good for it is such a factor as well

We expect buyers to uphold their end of the deal… should we be surprised they expect the same?

[AlbertaFarmer5]

it’s a shame that whether or not the guy who is paying us is going to be good for it has to be such a factor in marketing


But by that measure; the graincos could say it’s a shame that the whether or not the guy who is supplying the grain is going to be good for it is such a factor as well

We expect buyers to uphold their end of the deal… should we be surprised they expect the same?

It is a big factor in my marketing of feed grain. I will happily take a slightly lower price and deliver grain myself at the elevator vs using a broker(s) and 3rd party trucking.
Knowing that I WILL get paid, knowing their won't be discrepancies in the scale tickets, knowing that grade issues and potential discounts will be known and dealt with immediately, and paper blended with all other loads, knowing that the load will be sampled properly, not one handful off the top, or bottom representing 44 tonnes, not risking that any of the brokers and the end user involved go insolvent before I get paid.

Many times I have feed grain cheques of amounts less than proper. When confronted with the mistake, they make it right, but don't offer any excuse, it seems to be just throw it at the wall and see what sticks, most must not notice, so they keep trying?

[Highlander]

I guess every area is different but as a rule we never commit a bushel to a contract before it’s grown and in the bin and haven’t had any issues with fall delivery if we desire to do so. Usually start delivering cereals in mid December to a small degree followed by pulses and oil seeds in February to June. South central sask. Everyones need for cashflow is different but as some have said here there are some very useful tools to meet those needs without making physical sales during or immediately following harvest.

[Guest]

[QUOTE=farmboy44;502712]I was agreeing with bucket alluding to if producers get a bail out for things going against them this year, why shouldn’t graincos get to argue it the opposite way another year. Bad precedent

Why didn’t you get the futures price plus posted basis? Where you the fella who left his july futures unpriced until June 30? Last traded price and highest bid are two very different things when volume is gone and it’s expiry day. I explained it a few weeks ago I can did up the post.

If graincos spec for feed barley weight is 50lbs that is because they have export sales and 1cw spec is 50lbs… 303g. Domestic feedlots likely have a bit softer spec, Ill be marketing some to them if I have weight issues but again, risk is a factor I know Cargills cheque is more likely to cash than some brokers or feedlots out there

Grade risk is BRUTAL. Don’t know what our price is when we sign up because we don’t know the spread because we don’t know the quality.. played the durum game for years learned not to lock in a 1[/QUOTE


Yes I “where” the fella
I had a locked in basis , a contract that said I could sell up to the last day at 11:00 am at +62 plus posted July futures
No where did it say there had to be a buyer ?
Not my *** problem ? There was obviously a sale at that price?
They made the contract

[Sodbuster]

Farmers have other alternatives to marketing and hedging their grain, rather than pricing their grain they could sign a basis contract and sell a futures contract with a commodity firm instead. Canola, oats and wheat all have a futures month specified in the contract, barley could be hedged using corn instead. It’s much easier to get out of a futures contract than a grain companies contract. Special grains are definitely a problem and should probably be not signed without a AOG.

I haven’t sold any grain I haven’t harvested for many years without AUG but have signed basis contracts ahead of time, in fact most years I usually wait till I find a good basis and price the futures last. Canola, wheat and oats I have hedged thru a broker ahead of harvest if prices are attractive.

[farmboy44]

[QUOTE=caseih;502729]

I was agreeing with bucket alluding to if producers get a bail out for things going against them this year, why shouldn’t graincos get to argue it the opposite way another year. Bad precedent

Why didn’t you get the futures price plus posted basis? Where you the fella who left his july futures unpriced until June 30? Last traded price and highest bid are two very different things when volume is gone and it’s expiry day. I explained it a few weeks ago I can did up the post.

If graincos spec for feed barley weight is 50lbs that is because they have export sales and 1cw spec is 50lbs… 303g. Domestic feedlots likely have a bit softer spec, Ill be marketing some to them if I have weight issues but again, risk is a factor I know Cargills cheque is more likely to cash than some brokers or feedlots out there

Grade risk is BRUTAL. Don’t know what our price is when we sign up because we don’t know the spread because we don’t know the quality.. played the durum game for years learned not to lock in a 1[/QUOTE


Yes I “where” the fella
I had a locked in basis , a contract that said I could sell up to the last day at 11:00 am at +62 plus posted July futures
No where did it say there had to be a buyer ?
Not my *** problem ? There was obviously a sale at that price?
They made the contract

Lol yikes. It absolutely is your problem. You made the contract specifically stating you wanted to retain ownership of the futures and only lock in the basis. So you need a buyer for the futures, not them.

I can Gaurentee your contract isn’t for the “posted July futures” it is for the highest price someone is willing to pay. I thought I explained it pretty well last time but I’ll see if a second time will get it through to you.

The one correct thing you stated is that the last trade for the July futures took place at the posted bid, let’s say it was 900 dollars. That does not mean the highest price available for you to sell the futures YOU SPECIFICALLY RETAINED OWNERSHIP OF is 900 dollars.

Once again, I’ll use a common stock example to try to simplify it for you. Your problem is you think the posted bid and the highest price available to sell at are the same thing.

If you own enbridge shares and they are currently priced at $75, that means the last transaction took place at $75. If you want to sell at $75, what happens if the highest bidder is only $74.95? Should you get $75? Now imagine that if regular stocks also could only go down $5 per day. On a day it goes down a full $5, buyers know the value is likely to keeps going down, so instead of bidding $70 they only bid 67. Same idea here. YOU still own the futures, so you are looking for a buyer, not the grain company. And unfortunately there isn’t a buyer at the price you want

I couldn’t comprehend actually pricing my grain on a basis contract and holding the futures component until the last day that contract is on the board. There would be literally next to zero volume left. Just wow. Guys don’t know what their pricing or the complexities of the market yet have the audacity to blame others for being naive

Seriously, you don’t understand this marketing tool and you should get it the hell out of your toolbox.

[the big wheel]

Bingo again.

And that is because Cargill is not speculating on the grain you sold them, whereas the feedlot could be open to unlimited risk and loss if they don't also have the cattle price and grain price locked in. Although most modern feedlots also hedge everything when possible.

Bingo bingo bingo get ready to accept what ever
Screw job goes your way because at least you ll
Get paid the screwing. Lmao

[farmboy44]

Bingo bingo bingo get ready to accept what ever
Screw job goes your way because at least you ll
Get paid the screwing. Lmao

In your area, is it actually impossible to deliver off combine in harvest without a contract? Crushers for sure I know usually can’t but with how much primary space there is now days generally someone is willing to take, although that is a luxury which you usually pay for by accepting a lower price. Just wondering if option is available elsewhere?