Spot Barley $125/Spot Corn $150/ MT

[rain]

spot barley is slightly overpriced calgary region at $125. While i expected barley to rise. I did not expect it this soon. Any comments?

[charliep]

Agree with comments including an earlier than expected price rally. Todays Statscan number reduced Canadian barley production (10 MMT versus 10.3 in August). Given Canadian barley disappearance is minimally at 12.5 MMT (2 MMT malt - seed and product), 9.5 MMT domestic feed and 500,000 seed), supplies will be very tight this year even with a bigger than expected carry in.

http://www.statcan.ca/Daily/English/061005/d061005a.htm

Are any of the grain companies guraranteeing current feed barley initial payments/offering top ups in terms of premiums/trucking allowances. At $142/tonne and say a $50/tonne CWB deduction, CWB feed barley payments are close to $50/tonne. I went to the Portland grain price website and they are not even quoting for barley.

The CWB fixed price contract for barley is $138.40/tonne Vancouver ($3.60/tonne discount to the PRO).

[charliep]

Oops! Math was never a strong point. Should be $92 after deductions ($2/bu if easier).

[TOM4CWB]

Charlie,

At a local elevator last week, I heard them talking about gar. of $2.25 through the CWB GDC A series.

I guess if you thought the CWB pool could rise... they talk about this... it could be a tool to take in a rising market.

Question?

Just how good do CWB pools reflect a rising market?

Past experience... they seldom even get half of it!

We suuurrre need some better marketing tools.

CWB "single desk" pooling detracts from a fluid Options market on wheat and barley in Canada.

This would be a big advantage... to get our CDN options market working... along with the transparency marketing choice would bring!

[TOM4CWB]

Charlie;

I see the DTN Portland Oct 3 Report has 2 Barley at $135/t (USD)

Sept 1/06 is reported as being at $112/t USD

"Barley..Bids continue to strengthen as exporters work to cover sales against limited farm offerings. Many areas report two-thirds or more of the 2006 crop has been marketed." was the barley comment.

"Wheat...White wheat bids roared into the new month trading nearly a dollar above a year ago and at the best levels in nearly 4 years. Cash trading has slowed considerably against the advance with bid structures showing good carries into 2007. Egypt is tendering tonight for part of their November requirements and US white wheat remains competitive." White wheat is $1.00/bu higher than last year...@$4.62/bu

[charliep]

I will note this conversation started with a comment about higher prices in the domestic feed market. It moved to the export market/higher prices because in some communities, this may be the best alternative (people need to review their situation/pricing in their local area). I will leave the question about whether farmers recieve enough information from the export market/prices to discussion (hopefully keeping to the topic of feed barley).

[wd9]

So Charlie, best guess, will feed reach higher than malt prices this year?

[TOM4CWB]

WD9;

Obviously in Australia this has occured already from info I have seen.

Now,

If the AU and CA single desks together can't bring up the price of Malt barley...

Good greif... are we Canadian and Ausie growers stupid, or what!

All the single desks do... is keep prices down... the exact opposite effect to the brain washing we pay to be told!

Talk about adding insult to injury!

[charliep]

Feed a premium to malt. Depends on where you live.

Southern Alberta - likely if not there today (both $3/bu keeping in mind there is potential premiums for low protein, VIP premium, interest/storage, trucking premium, on malt barley versus immediate cash/no guessing final payment/risk malt barley looses germination over winter).

The premium of malt over feed will widen as you move north with again your attitude to risk (i.e. carrying malt barley through high feed price only to get rejected in the spring) and need for cash determining factors. As an example, I suspect the spread at Red Deer would be about 50 cents/bu.

Will the feed/malt spread narrow? Quiet likely given the tight feed supplies - particularly if there is a large feeding operation close to your farm (example - less feed wheat likely means more barley in pig rations/higher regional prices). This has maltsters very worried as they are not able to compete for barley supplies based on price - they remember 2002 when they had to import European barley. US barley is being malted in Canadian plants already (contracted last spring).

[TOM4CWB]

Charlie,

E. Central AB $2.62 Dec, picked up in the yard.

THe CWB HAD to Raise PRO's... yet, do they in the end have to pay? NO.

This is the problem.

The market doesn't have to pay up to get the grain.... when buying from a CWB Pool.

And in a down trend market... the CWB is the first to drop the price.

THe CWB is a monopoly for the buyer... not the grower...

The buyer can go any other place on planet earth and buy what they need... and as you just pointed out Charlie... the US barley feeding CDN malt plants...

Arbitrage price for CDN bly malt supplies... now $3.20/bu... could have contracted late winter 06 at $3.50/bu.

And the CWB PRO is $2.85/bu?

Time to go back to work... before....


And the Single minded people want to vote on continuing the theft of our younger generation off our farms?

Better that we all suffer together.

[cottonpicken]

The smart money is now moving into the grains and it has nothing to do with demand.The commodities are in a bull market and now it is our turn.It is impossible for oil to go up and wheat to go down.Oil made 200% in a short time so I would say we have a ways to go.I stated 20$ wheat in 3 years and i'm sticking to it.

[charliep]

cottonpicken

Not sure what you mean by "smart money". If you speculative money, then the other side of this issue will be volatility. Speculators make money off volatility - not direction. Farmers can look forward to a bucking bronco price ride. If you are right (don't necessarily agree), then knowing pricing alternatives/having a marketing plan will be critical in the future.

[rain]

My point boys is what are you going to do. Take some basis and ride. Loose money on basis if futures continue to run? Stick your heads in the sand and cry when its all over? We have been here before if cotten picken is right lock in basis now!

[malleefarmer]

On farm price for barley on farm in Aust today is Feed 1 $220 and Malt 1 $245 that aust dollars of course which equates to 183 canadian for feed and 204.33 for malt at exchange rate of .834 ie our dollar is 83 candian cents.
Thats cash price with drought premium/basis the export pool on the other hand is $137 aust on farm or $114 canadian and for malt 1 export pool $180.60 aust or $141.87 canadian
cheers the drought is getting worse and worse despite what ever reports youve heard we had hottest oct 4th day on record here this week 36 c and crops are flowering or filling and the later sown crop are just frying up except another 20 to 25% reduction out of aust the usda report probably wont report it until nov/dec

[Pulseman]

Why is everyone wondering about what is happening? Two years of oversupply of feed, this year good quality of export grain, good demand and bingo the feeders are scabbeling to fill the bins. Will see if this is a test for market highs, like 02/03 with C$200 for Bly and 96 with C$190.
Lethbridge bit today (06/10/06)was 132.30 pickedup.
High freigth cost support Alberta/Sask. product over Great Lakes corn, as well as ever increasing demand. Corn US$6.00? Lethbridge Bly C$220/MT??
What are the supply/demand #'s?