China

[sawfly]

interesting article on the commodity charts site about china cornering the market on vitamins.
What does chinas rise to an economic super power mean to farmers or our country?
we seem to think its fine to have europeans come over to our country to reinvest in agriculture. Would we feel the same about the Chinnese?
I have thought that the Hutterittes were the most effiecent model to survive and prosper farming.
maybe the chinnese are even better.

there may be thousands of reasons to maintain a healthy farm econmy, Rather than one mired in debt and ripe for the picking.

[charliep]

China is 1.3 billion people (20 % of world population) so their improving economy and growing middle class is nothing but a positive for Canadian agriculture.

[wd9]

Charlie, tell that to all the people that used to own manufacturing and or work in facilities in Canada and the US before it all moved to China.

Raw products are pillaged from North America, value added occurs in China, it comes back to NA and sold at WalMart. Voila, trade deficit. The same will happen with Ag, chinese fertilizer, chemicals etc. Value added dollars will remain in China.

Is it good for Canda? Only if you're thinking is limited to being a consumer. Not a value added/manufacturing sector.

[charliep]

Wheat - no surprises.

Barley (malt and feed) - Ouch. And the advantage of having barley under the CWB is _______?

[charliep]

Should leave for this PM but a first cut at the 2006/07 basis contract is $17 over for CWRS (MGE) and and about $30 under for CPS (KCBT).

CWRS conservative but ... ah, what the heck. CPS wheat (and for that matter the new varieties of hard red winter) - what is the true value of this crop?

Just as thought - likely a time to consider locking in the futures side of CPS (either sell KCBT or do through the CWB) and wait for the basis to strenghten.

[charliep]

Would agree on the manufactured products side but wouldn't agree on agriculture commodities/products.

I note the opportunities that a favorable WTO deal will give commodities like canola both with regards to other commodities (soybean oil tariff versus canola oil) and processed product versus seed. Leveling the playing field even a small amount will create more opportunities in a market of this size.

I also note the environmental issues that China will have to deal both as a result of population but also increased industrial growth (chemical spill disaster Northern China this summer).

Finally, I would highlight the agri-food investment opportunities coming out of China into western Canada are a good thing. They can bring both venture capital and market access/knowledge of how to do business in China.

Something that had better be on everyones radar screen is bird flu. I have read a couple of articles in the last week that indicate China is very worried about their ability to handle a major bird flu outbreak. A major kill off of birds will impact feed demand. The European consumer is already reacting to the bird flu news by reducing poultry consumption.

[sawfly]

charlie
any particular reason i shouldnt price some HRS, and wait for a stronger basis.
won't hold you to anything, but that was my plan to price 10%
any thoughts apprec.

[charliep]

Sawfly - Would consider spring wheat as well at the futures level (let basis ride) and maybe even locking in a fixed price contract.

Would highlight the first cut at fixed price contracts/basis.

http://www.cwb.ca/db/contracts/ppo/ppo_prices.nsf/fixed_price/2006_index.html

I note the fixed price contracts are above the PRO's in most cases with the exception of durum. Basis levels are not as bad as what I thought - particularly for hard red spring wheat/MGE.

What are others thoughts on strategies?

[cheapskidoo]

Charliep, the bird flu is scary, but at the same time if poultry consumption weakens then shouldn't some other animal be consumed, which would need feed?

[northernfarmer]

Gotta be blunt here - why do we continue to sit back and let the board do this to us? I am absolutely pizzed about the basis level they put forward for winter wheat. Where is the logic? And this was a program put in back in 2000 to allow for producers to have more control on pricing>>>>