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[Incognito]

REUTERS: Iraq has bought 500,000 tonnes of wheat from Canada, U.S. grain traders said on Friday, but the Canadian Wheat Board declined to comment on the deal.

Kansas City wheat futures fell 1-1/2 to 3-1/2 cents per bushel on news of the deal, worth about $95 million, traders said.

"I believe the Canadians came down to the $190 (per tonne) FOB the Iraqis were looking for," said analyst Charlie Sernatinger with Chicago brokerage O'Connor & Co.

The best U.S. offers for hard red winter wheat were about $200 per tonne, on a free-on-board basis, he said.

Late last year, Iraq bought 1 million tonnes of wheat from U.S. firms at about $190 per tonne FOB.

The Iraqi Grain Board initially said it favored buying U.S. wheat but a rally in wheat futures pushed prices to the point where Iraq said it had to look at alternative sources.

Kansas City wheat futures have risen as much as 20 percent since early January, dampening wheat sales abroad for the United States, the world's biggest wheat exporter.

Prices are soaring amid buying by investment funds and concerns over crop damage due to a drought and cold weather in the southern U.S. Plains hard red winter wheat region.

U.S. grain traders said Iraq bought the Canadian wheat for shipment from March through May.

"They (Canada) were cheaper than U.S.," said an export trader who takes part in wheat tenders from Iraq.

A spokeswoman in Winnipeg for the CWB, which has a monopoly on western Canadian wheat and barley exports, cited company policy for declining to confirm or deny the deal.

[cropduster]

Well I guess the Grainworld attendees should get the truth????Could they expect anything less??

[Jman]

Thats what happens when you have multiple sellers in a single market.

[Incognito]

Who knocked the asking price down by $10.00/MT, JMAN and where is the premium?

[charliep]

Would be curious to have the full details of this sale including grade and port.

I notice the sale is fob (exporter port) with a converted to Canadian dollar price of $215/tonne fob (loaded vessel) or about $205/tonne instore. $50 would be the deductions to turn into an Alberta price. To give us a better understanding, it would be nice to know what grade was contracted for.

It would also be nice to know port. The HRW is likely Gulf shipment and both Vancouver/St. Lawrence would have a larger ocean freight bill. This would be included in the calculation.

[charliep]

News like this makes always gets me excited/curious.

I note a tender. No different than a farmer/group of farmers going to the market place via a tender to buy urea fertilizer for April 21 to May 21 delivery. Cheapest price gets the business. A buck a tonne will swing the business.

I also note the business was done FOB (loaded exporting countries port). That tells me (could be wrong) the business was done optional origin with the "evil" multi nationals doing the ocean freight package to get to Iraq. Maybe the Iraqis arranged freight but not likely. The CWB does not do a lot of CIF business (delivered importers port).

Likely only of interest to me but interesting to break a piece of news like this down into the physical transactions/movement issues and implications.

[cropduster]

I guess we`re missing it Incog...that 10 discount shows `the POWER of the CWB`....kinda like when they railed grain all the way from Quebec/Montreal to Van!!!!!!And most guys B(%^& when they have to haul grain 100 miles.Wonder how many 3tons a guy would wear out hauling that grain from TB to the seaway ports then back to Van...oooppss, sorry forgot about that `POWER` thing!!!!

[Incognito]

Australia Wheat Board Bid Seen Lowest At $179/Ton In India Wheat Tender -2-

According to the tender, the wheat has to be of the current 2005-06 crop and will be imported through the country's five south Indian ports - Mangalore, Chennai, Tuticorin, Visakhapatnam and Cochin - between March and mid-May.

Between 250,000 and 300,000 tons has to arrive by April.

Many of the bidders termed it one of the toughest tenders they have ever participated in and said some of the quality norms being imposed are perhaps not even met by varieties grown in India.

The moisture content in the wheat should be a maximum 12%, the tender document said and the minimum protein content on a dry weight basis should be 10%.

According to the tender, poisonous weed seeds shouldn't exceed 0.4% within the overall limit specified for foreign matter, of which dhatura and akra mustn't exceed 0.025% and 0.2% by weight, respectively.

It also set limits for insecticides and pesticides and listed 32 types of poisonous weed seeds from which imported wheat should be free. These include allium vineale and ambrosia maritime.

Initially, the tender document said wheat should be free of confused flour beetle - or tribolium confusum - but this condition was later withdrawn.

Earlier this month, the Indian government gave the nod for importing 500,000 tons of wheat through STC without levying import taxes, to augment domestic supplies and reign in prices. This is the first time in six years India is importing wheat.

According to the government's latest estimates, India's wheat output in 2006 is likely to be 73.1 million tons, compared with 72 million tons last year.

http://sg.biz.yahoo.com/060224/15/3yy9n.html


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Vader can you please explain to me how monopolies through a single desk extract a premium from the marketplace on every tonne of grain they sell?

Could it be that the US is ripped at the AWB and CWB because they continually undercut the market?

Is it better to have two monopoly sellers rather than adding another 10 sellers or is the monetary reward monopilies only push it down once to make the sale rather than 10 times?

One thing that grain companies look at when making sales that I doubt that monopolies do and that is "what is the replacement cost of the product?" and actually offer based on replacement cost rather than actual cost. That is not conducive for pounding the price down.

If you do not respect the market, the market will not respect you - and that line is older than you and I combined Vader....

[sawfly]

assumeing all the facts are right

what would everyone have said had we not sold any wheat. we have got piles on the ground and the board cant make a sale
or the eec or australia ukraine filled that sale.
what are you all complaining about this is how an open market works. the more sellers the lower the price.
Unless you want to set up a wheat board for every exporter in the world to have a monopoly over sales.

[Incognito]

Simple question:

Why do we need a monopoly to take less than world price?