Grain prices

[AdamSmith]

Could someone explain to me the corelation or more precisly the lack of corolation between KC/MGE/CBOT wheat and CBOT Corn and WPG Wht and WPG Barley?

It's very frustrating seeing KC up 14c and Minny up 12c and Corn @ $2.40 in US dollars (that is still 115% of the Cbuck) and Wpg wht down .10/t and bly down 1.2/t!

Who and/or what is responsible?

How much longer can Canadian farmers survive with this situation?

What is the signal I'm suppose to take from rallying US wheat and plumiting Canadian wheat. Don't even tell me the CWB will capture this value because we all know they won't.

The CWB is failing us and so is the domestic market.

[nw9flynn]

WCE is western canadian feed wheat. You do not price any board grains through this market.
When you do a BPC through the CWB you use the MGE. When this market rallies you can take advantage through the CWB. You can also hedge you prices through Puts in any wheat market if you wish as long as you have an account set up with a broker.
I hope this anwsers you questions.
Tom, Lee, Charlie, do I have this correct?

[charliep]

Perhaps the answer might be a total lack of arbitrage between the two markets. I forget whether you or someone else who made the comment a year ago about the run up in corn prices and the inability to translate this into higher prices/delivery opportunities.

Western Canadian farmers need the ability to cash sell wheat at the end of the crop year to move inventory. Doesn't matter whether in current structure using Daily Price Contracts or an open market.

[charliep]

You are correct with the only comment you must have booked basis prior to October 31 for old crop or have a daily price contract signed prior to July 22 (again old crop). You can only sign a basis contract for delivery after August 1 2006. With the fixed price contracts, you can't deliver using old crop contracts/calls, put on a storage ticket and price into new crop using an FPC.

Holding inventory into new crop means you have to use 2006/07 delivery.

What is needed is a price signal from the current rally and the ability to move including south. Holding grain off the market is only benefiting one group of farmers - US ones.

[crusher]

One should pay particular attention to December KC wheat this week. With today's price action we will be running into resistance at the previous top shortly. If it breaks through great, if not then it may be time to hedge.