"Contract squeeze worries farmers " is the WP headline

[farmboy44]

Isn’t part of the issue that farmers are currently on the hook for what the buyers sold it for?

Sales isn’t my department but the impression I got was if someone has $11 canola contracted, they’re being told they have to pay like it’s a $20 contract to buy out because that’s what the company sold it for. But I could be understanding it wrong, I’d need it written down for me to really absorb 😂

When they buy grain they sell futures. It would be hedged (sold) on the ice futures at $11. When the contract is cancelled they would need to buy back the futures at $20 since they aren’t receiving the grain to offset the position they sold. They would be out $9/bu on that transaction, real cost.

[Partners]

Their line is if you don't contract you can't deliver?
Cuz boat is coming..if it's full tuff for you.
Sales pitch, like a machinery dealer or car salesman.etc...

[Blaithin]

When they buy grain they sell futures. It would be hedged (sold) on the ice futures at $11. When the contract is cancelled they would need to buy back the futures at $20 since they aren’t receiving the grain to offset the position they sold. They would be out $9/bu on that transaction, real cost.

Ok, so I’m not totally misunderstanding it’s just not clear as glass in my mind and I don’t speak the lingo.

But shouldn’t the buyers be on the hook for the $9, they’re the ones that sold the futures. The farmer sold for $11, the GrainsCo decided to sell on the futures and that’s screwing them now.

Do they HAVE to sell on the futures or they choose to because that’s how they can make like bandits a lot for the time?

Goes back to farmers footing all the risk, doesn’t it.

[farmboy44]

Their line is if you don't contract you can't deliver?
Cuz boat is coming..if it's full tuff for you.
Sales pitch, like a machinery dealer or car salesman.etc...

It sounds like there are times in which more people want to deliver than there is space for

You realize the commodity pipeline runs 12 months per year, not just 12 weeks?

Not everyone can move everything all at once, hence why those who are willing to commit to supplying seed in prime windows are given the opportunity to utilize them

The lack of accountability here is amazing. The companies are the ones who are the bad guys because they want to fufill the deal both parties agree to.

Not surprised coming from you, partners should get to haul whenever he wants and get the best price regardless of how many others are willing to haul for cheaper at the same time.

just know your in the minority.The silent majority of us don’t want to see the rest of us fund some bailout for others unfavorable decisions.

[the big wheel]

You’re talking about staying within the current parameters of
The system we have.
It really doesn’t sound too good when the grain co is stuck with
9 buck loss does it? So why is it acceptable for the farmer to
Bare that risk? We’re richer or what? One of the problems
Is this fake pricing in the fall. Never more evident than
Last year prices were based on a fake production number
That who was promoting? Grain companies were. I’d like to see rhe
Books on who bought what at 11 bucks and got sold at 20?

[farmboy44]

Ok, so I’m not totally misunderstanding it’s just not clear as glass in my mind and I don’t speak the lingo.

But shouldn’t the buyers be on the hook for the $9, they’re the ones that sold the futures. The farmer sold for $11, the GrainsCo decided to sell on the futures and that’s screwing them now.

Do they HAVE to sell on the futures or they choose to because that’s how they can make like bandits a lot for the time?

Goes back to farmers footing all the risk, doesn’t it.

They don’t have to hedge the futures.. several commodities (durum, flax, peas, lentils) have no futures component.

However the farmer didnt deliver the grain, therefore they are in breach of the contract. Companies also make sales based on the cost basis of their ownership. Do they get to just tell their buyer next year?

Do you really think you should be allowed to just contract at 11, not deliver, and sell it across the street for 20 bucks?

[Blaithin]

They don’t have to hedge the futures.. several commodities (durum, flax, peas, lentils) have no futures component.

However the farmer didnt deliver the grain, therefore they are in breach of the contract. Companies also make sales based on the cost basis of their ownership. Do they get to just tell their buyer next year?

Do you really think you should be allowed to just contract at 11, not deliver, and sell it across the street for 20 bucks?

No, be on the hook for $11, buy out the $11 if you don’t deliver. Why do you have to buy out for the company too? It’s a risk for the farmer to forward sell which means it’s a risk for the company to forward sell. Why don’t they foot that risk like the farmer does?

[farmboy44]

You’re talking about staying within the current parameters of
The system we have.
It really doesn’t sound too good when the grain co is stuck with
9 buck loss does it? So why is it acceptable for the farmer to
Bare that risk? We’re richer or what? One of the problems
Is this fake pricing in the fall. Never more evident than
Last year prices were based on a fake production number
That who was promoting? Grain companies were. I’d like to see rhe
Books on who bought what at 11 bucks and got sold at 20?

Which party is nullifying the contract? If you cancel your mortgage does the bank pay you a penalty? If the land market crashes should the bank reimburse you for lost unrealized gains?


And we wonder why city folk perceive us as complainers

[farmboy44]

No, be on the hook for $11, buy out the $11 if you don’t deliver. Why do you have to buy out for the company too? It’s a risk for the farmer to forward sell which means it’s a risk for the company to forward sell. Why don’t they foot that risk like the farmer does?

Because since you breached your contract the company now has to pay 20 dollars to replace the tonnes they bought from you at 11

[Blaithin]

Because since you breached your contract the company now has to pay 20 dollars to replace the tonnes they bought from you at 11

Is it in the contract that you have to buy back what they sell if you breach?