CWB sells wheat at $30 tonne discount

[AdamSmith]

SAO PAULO, June 13 (Reuters) - Brazilian millers bought three cargoes of western Canadian wheat totaling 80,000 tonnes, the Canadian Wheat Board said on Wednesday. The CWB also said further shipments were possible. "One ship of western Canadian wheat has departed for Brazil, another is being loaded and a third nominated," CWB media relations manager Maureen Fitzhenry told Reuters in a e-mail reply. "I should add that this may not be the end of the vessel nominations to Brazil," Fitzhenry added.

Brazilian traders earlier had reported purchases of Canadian wheat by millers in northeast Brazil who received a discount of $30 per tonne from the Canadian Wheat Board. "They paid $190 per tonne two weeks ago, when the price was $222 per tonne FOB," Lawrence Pih, president of Moinho Pacifico, said, adding that the first shipment was due to
arrive at the end of June.

Canadian wheat is now about $230 per tonne. Brazil's wheat is harvested in September, but won't be ready for milling until October. Pih said supplies would become critical in August, when Brazil will be looking for U.S. or Canadian wheat.

Brazil is the world's biggest wheat importer in 2006/07(Oct/Sept), purchasing 7.9 million tonnes. It is suffering from a shortage of supplies from the domestic market and from Argentina, traditionally its main provider. Brazil's wheat crop was ravaged by frost and drought last year. Output was only 2.2 million tonnes, compared with demand for 10 million tonnes.

Some Brazilian traders forecast that Brazil could buy up to 2 million tonnes of wheat in 2007 from non-traditional suppliers.

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And there are farmers going to court to preserve this hidious institution.

Amazing!

[Fransisco]

Can you put up the link or web address from that story?

[cropduster]

Adam.......can`t you just "feel the love" the CWB has for it`s subjects!!!!!

[AdamSmith]

I first read it on Small Dead Animals in the comments of a cwb posting so I googled Canadian Wheat Board and Brazil and found this,

Daily Ag Market Commentary
Thursday, June 14, 2007

by Chris Haverkamp of Paragon Investments, Inc.

Paragon Investments, Inc.

Thursday, June 14, 2007

....In Brazil, consumers in the north are seen importing Canadian supplies, as they are experiencing supply constraints....
-------------------------------------
But then I went to Google Brazil and googled Canada Wheat and wow there it was. Funny how the Western Producer or the MB Co-operator or the Wpg FreePress of the Leader Post run this kind of CWB news.



http://www.revistafator.com.br/ver_noticia.php?not=12229

This article is in Spanish so you will have to translate to English

14/06/2007 - 09:30

Wheat: Brazil attends the scaling of the high prices of the cereal in the international market


São Paulo - the mills of wheat of Brazil, world-wide import greater of the cereal in season 2006/07, attend a scaling of prices in the international market in the period exactly where they will search the product in countries as United States and Canada, where the values more are raised and have more incident taxes in the businesses.

In the hemisphere north, companies of Brazil had bought in the last days at least 80 a thousand tons of Canadian wheat, informed CWB (Canadian Wheat Board) in this Wednesday.

According to sources of the sector, the business with Canada was made when the quotations were lower of what the current ones.

But the volume of 80 a thousand tons, the first one of the resultant year business-oriented of bigger countenance, is small close to what the country will need to acquire of origins is of Argentina, the main supplier of Brazil, where it practically does not have offers.

The international prices, that already were firm indicating the lower world-wide supplies in decades, had gone up plus this week with notice of productivity low of the North American harvest and of information in problems in the farmings of the European east, that had stimulated the market. The contract “spot” in the stock market of futures of Chicago, for example, is in the biggest value in 11 years.

“In Argentina it does not have more offers… the wheat of Canada went up, of U.S.A. it also went up, and Argentina nor it opens new registers (of exportation) nor has it offers to make”, it affirmed the Suppliment manager and Finances of the moageiro group Anaconda, August Fernando Ribeiro de Souza, adding despite nor main tradings has Argentine wheat to vender.

The market esteem that from August the country would receive from U.S.A., Canada or another country of the hemisphere north between 1 million and 2 million tons of wheat, amount that would be necessary to take care of to the national consumption in this year.

Souza foresees a reduction in the arrival of Argentine wheat already in July. In June, the importations of the neighboring country still would be remained next to the registered ones in May (635 a thousand tons).

“In July the landings (of Argentina) with certainty go to fall… find that from July and August the thing goes to be critical, it has mills that they are very short, that does not have made purchases”, added Souza, observing that the situation of the Anaconda, however, is comfortable in supplying.

“They lack to 2 million (of tons), somebody goes to have that to search, the harvest new (Brazilian) it leaves in September, but this wheat alone is worn out in October, because before this it is not useful for panificação”, said it, evaluating that the country would need to outside import of Argentina something around 800 a thousand tons for month in August, September and October.

“The ascent (of prices) was sufficiently fast. One is going up more than what people waited, or another mill had vision and opted to a position “long” (bought), but is very few. Of general form, 90 percent of the colleagues did not wait this high so dramatical”, affirmed the president of the Pacific Mill, Lawrence Pih.

Pih, however, believes that the Argentine government can liberate more 500 a thousand tons in exportation registers and that, with the entrance of the national harvest, has greater offers.

“But exactly thus we will have that to search wheat in other places, the estimate of market is between 1 million and 1,5 million”.

In purchases it are of the Mercosul, beyond the prices to be higher, still taxes happen that do not exist for purchases in Argentina or other countries of the South American block.

Recent the high one in the quotations, allied to the raised freight, must limit purchases is of the Mercosul, for however. The proper Pih admitted that it could have bought North American wheat has two weeks, when the quotations (FOB Gulf) was around 205 dollars for ton. Currently they are in 235 dollars. “He is everybody seeing the market American, only that who has courage to buy? I myself was thinking about making a boat (100 a thousand tons)… lost the moment”, added it.

In Canada - Both also agree that the Brazilian companies had not been to the purchases before are of the Mercosul because they believed that a great North American harvest would pressure the prices, what it could facilitate businesses. “Who does not have resources, is half skeptical, does not go for the risk”, detached Souza.

E moreover they had pointed out that the national mills had not made more anticipated businesses because the financial situation of the sector, in a general way, does not allow.

Segundo Pih, the business with Canadian wheat, made for mills northeast, it was only possible because the CWB “gave discounting of 30 dollars for ton and there it made possible the operation”.

“They had bought the 190 dollar (the ton), was 222 dollars (FOB) when had made the business has two weeks”, the president of the Pacific said, remembering that the first one must arrive at the end of the month at Brazil. The Canadian wheat already went up for 230 dollars. “Critical it goes to be the August month, we go to have that to beat eventually in the door of the North American wheat and of Canadian wheat, depending on the price and the freight. “| For: Robert Samoa/Reuters.

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When is enough, enough?????

Why do we have to put up with these lying cretins selling wheat for a buck a bushel under market value for one more second ????

Ritter and company have some serious explaining to do!

I think every board member should be forced to resign in disgrace.

[AdamSmith]

Of course the cwb will deny they sold at such a huge discount,

So since Minister Strahl is in the changing regulations mood, how about a regulation making it mandatory for the particulars of all sales made by the cwb to be made public.

I think with the Canada Malt discounted sweet deals, the Algerian Durum discount and now the Brazilian milling wheat discounts we have enough justification to demand that all sales information be made public within 3 days of any sale. And failure to do so will cost each director $100,000 for each incidence of failure to comply or a false discloser. The practice of discounting grain would end quickly then.

Commercial sensitivity be damned, these guys don't deserve the privilege to be able to do business outside of public scrutiny and public oversight.

The Directors are a complete joke, for all their hot air about single desk clout these guys just sit back and say zip when the clowns in the sales dept. give our grain away.

[AdamSmith]

In Canada - Both also agree that the Brazilian companies had not been to the purchases before are of the Mercosul because they believed that a great North American harvest would pressure the prices, what it could facilitate businesses. “Who does not have resources, is half skeptical, does not go for the risk”, detached Souza.

E moreover they had pointed out that the national mills had not made more anticipated businesses because the financial situation of the sector, in a general way, does not allow.

Segundo Pih, the business with Canadian wheat, made for mills northeast, it was only possible because the CWB “gave discounting of 30 dollars for ton and there it made possible the operation”.

--------------------------------------


So not only are we supposed to prop up our lazy neighbors farm and pay 500 employees to do the job of 20 and pay directors salaries to socialist political wannabes whose only direct knowledge about the market is knowing where to put the cart after they load the groceries in the car,

we also have to cover off poor risk management decisions by foreign millers!

Message to PM Harper, Kill this Parasite and kill it fast!

[wilagro]

Did YOU ever buy anything and a week later find that the price had gone DOWN?

Did You ever buy anything and a week later find that the price had gone UP?

That is what happens with the "free market"...there is price variance from time to time.

Bought any gasoline lately? Price volatility is in play with wheat sales too. Live with it. Do you sit with full bins, scared to sell because the price might go up and you would miss out?

What a bunch of sensationalist bullshit...the posting was intended to stir up discontent with the CWB, IMHO.

[SASKFARMER3]

Wilgro good theory, sensationalism.
HA HA HA HA HA HA HA HA HA
This damn organization has been a disaster for the western Canadian farmer and guys like you continually think its good then you just you keep the damn thing and let the rest of us see what the real world is like, I can bet in a year you will be with the rest of us when you see how well we are going compared to you.
GIVE ME A BREAK THE END IS NEAR< THANK GOD>

[AdamSmith]

Wilagro, let's see if you can understand this.

#1 This is not a situation where the price went up the week after they bought. This is a situation where the market was at $222/t but the cwb sold for $190.

Here's the quote, "They paid $190 per tonne two weeks ago, when the price was $222 per tonne FOB,"

Great for buyers, horrible for growers.

#2 Absolutly yes this post was intended to stir discontent about the cwb, I was trying to shine the light of truth on the cwb selling practices and how these parisites are systematically giving away millions of dollars of wealth.

What part of this can you not understand?

Why can you guys not get why we're pissed?

We're in the business of growing grain for a profit, period!

And when we see the cwb giving out massive discounts that means less profit for us growers, when we see the cwb basis levels of fixed price contracts 70 cents a bushel higher than at a point in ND that is a mere 40 miles away from my farm, that means less profit for the growers. When we see the "Friends" trying to prevent farmers from accessing prices for barley that are upwards of $2 per bushel higher that means less profit.

It amazes me that any one would defend this as being in the interest of farmers? There is a huge disconnect between how I think and how you think, because there is no way in gods green earth this can be seen by anyone who is in business to make a profit, as being acceptable or as maximising growers returns. They deliberatly undersold the market, at your and my expense. Don't you see how wrong that is???

What I can't understand is what makes you guys tick. What motivates guys like you to defend this system and this institution when there is more than ample proof that it cost farmers alot of money and it cost the prairies considerable wealth. I guess I'll never figure it out, but isn't that the point. In our society we should be free to live the life we choose and be free to pursue that life even if others disagree, but with marketing wheat that isn't the case is it? you and guys like you demand we do it your way and screw what others think and how others feel and what others believe, not only do you demand it you demand we be forced, by threat of jail if necessary, and that's WRONG, no matter how you slice it wilagro that is just plain morally wrong.

So yes I'm trying to stir discontent, and as long as I'm compelled by law to market milling wheat or export wheat to the cwb, I will stir as much discontent a I possibly can.

[Incognito]

The Reuters article is bad enuff now factor in they sold at a $30.00/MT discount 2 weeks before their bullish wheat forecast.

Half a million could have bot some intel rather than a stress bonus.

[parsley]

AS:

I.Q.

[wilagro]

Well...AdamSmith: Suppose you have some wheat for sale at $222 per tonne and I say that I will take all that you have at $200 tonne providing that you sell me 100,000 tonnes as your neighbour down the road has offered to do. Would you sell? Suppliers discount prices all of the time for substantial amounts/quantities. I purchased merchandise for years and I know how negotiations work when deals are struck.

Put yourself in the boots of the CWB salesman and see how you would do things differently. They have to compete against other countries or didn't you know this?

[Incognito]

Then change the name to the Cheap Wheat Board...

bend over for 100,000 tonnes?

did you feel that premium?

How does that KY with sand feel - Willy?

[just_wondering]

wilagro are you proving Adams point point there is no power in the single desk we all sell at a world price the difference being freight and basis levels you asked if he was the CWB what would he do?
I'll answer the question if the price is $222 a tonne charge that don't just discount until you get the sale because you don't have a replacement cost.
we are all competing against other countries and yet with the CWB we are doing it with our arms shackled.

[Burbert]

Yeah, lets all do our selling on our own, screw the brokers. We'll be rich, IF we don't cut each others throats! Now there is an idea worth discussing. Who said I have nothing to contribute for you marketing gurus to contemplate?