New Crop Market Strategies

[charliep]

Any thoughts on approaches to new crop market strategies?

I note that today is the first day you can sign a CWB daily pricing contract. Not perfect but am still recommending use for a percentage of your crop. Just to make sure you are aware, you can only sign a DPC as a production contract with actual pricing not starting till August 1.

I also note the nice rally in canola. With November canola around $305 and current basis levels, new crop prices should be in the $6.50 to $6.75/bu range. Depending on financial situation, I like the idea of some pricing. If you are not willing (and financially able to take the risk), would be looking at some type of minimum price contracts/options strategy and/or pricing orders.

[charliep]

Unsuccessful on the first attempt to get any market chatter going so will try again.

With the exception of some areas in Saskatchewan that are having trouble getting seeded, most of the crop in western Canada seems to be off to good start. Same comments the US but more nervousness given the impact bio fuels industry on usage.

Again, what are your market strategies? Is doing nothing and hoping the best course?

[crusher]

I've sold 15% new crop canola on scale up. Went to January and March 2007 because of better basis. March and further out is pretty thinly traded so GPO's might work (has for me).

Sold 15% cps wheat on FPC but did that a while ago. $5.00 Kansas July wheat was pretty attractive resistance level but didn't price anymore because that coincided with a 91 cent dollar and a super wide basis. Still have to price my basis on FPC - ouch!

Still sitting on 10% old crop canola, some green peas, some feed barley and a growing amount of feed wheat due to tighter elevator grading. Which do I sell before new crop, or is the carry worth storing for a while?

[Jagfarms]

Thinking we should contract some new crop Canola but have not yet. Checked out some new crop contracts for other crops and there is not much out there. There was some new crop contracts for desi chickpeas for 12.5 cents/ pound but I do not think it will go much lower. We have 11 different crops seeded this year and nothing but canola looks to attractive for new crop contracts. We have old crop #2 large green lentils that we could sell for 7 cents/lb but I do not think it will get much worse. I have been phoning around and there is not much demand for red lentils at this time or new crop contracts. They say there could be good demand and prices for Desi and Kabuli chickpeas at harvest time but we have to grow them first.

We could have contracted our Canola last week for $6.50 delivered 90 miles from our farm in Sept 2006. I am thinking I should have contracted some at that price to get some money at harvest time.

What are your thoughts on the canola and other markets?


Jason

[charliep]

Just a note to highlight today's USDA report. Smaller than expected US hard red winter wheat crop. Tigher US corn carryovers. Lots are discounting given dates of survey (HRW yields slightly better than expected and US corn acreage still based on March intentions).

Will leave my thoughts on markets till others have had a chance to chip in.

[Pulseman]

Again Charlie, my surprise of the lack of input on this most important issue. My feeling is, this CWB identity white washing is way to complicated. If I am playing with the thougth to market grain or calculate my profitability, I need actual prices, my gate, now. I do not want to figure this, that and something else in to endup with X$? The Board has added more and more possibilities, rather then improving the old system, I don't know if this was good.

[TOM4CWB]

Pulseman;

What would you think of a CWB specialty wheat production contract with a weather rider that gave a grade compensation rider if we had bad Sept weather?

We need a large marketer to spearhead quality issues to stabilise our western Canadian market. Innovation and effective risk management needs to be a priority at the CWB... not a chant about how the "single desk" is going to save us!

[Pulseman]

Tom4cwb, what we need is direct access to world markets, not through the cwb but by direct prining into anywhere in the world. Don't say it is impossible, because it is. Farmers in the Ukraine sell 5000 Mt of malt barley into Europe, without any middle man. My friend in the former East germany sells 500 MT of wheat into Swedden without a middle man.

I say it again and will do till I drop: g i v e m e f r e e d o m e !!!!!!!!