Watch for US Corn Imports

[charliep]

Just a note that with the market down today, Alberta is close to importing corn for feedlots (already happening ethanol plants).

Current US corn basis for track Alberta is somewhere around 65 to 70 cents per bu over CBT. With December corn at $3.40/bu, that puts track local delivered prices close to US $4.10/bu or CDN $170/tonne track. You can add the cost of movement track to a feedlot to that to get a delivered price.

You can compare to December western barley futures at about $170 ish and a traded basis of somewhere around $20 over delivered southern Alberta.

[wilagro]

So does this mean that the sky-high barley prices will take a dive and dash the "barley freedom day" marketer's hopes of "Nirvana"?

Or is this just the result of normal "market" adjustment as one product's price gets way out of line?

[agstar77]

You mean free Barley might be cheaper than enslaved barley? Tres Tragique!

[charliep]

Just noting that corn will limit how high barley can go (or for that matter will pull barley prices higher if nasty weather occurs in the mid west). Will likely see corn imports over the next winter. Is that good or bad? Will leave for discussion.

Will note there is export business being done with the Saudi and the signal is being translated back to the farmer in terms of good prices straight off the combine. This will help both cash flow and bin space issues.

The struggle under single desk has been to translate a sales opportunity like this into a market signal (realizeing that innovative things have been done like guaranteed delivery contracts, two pooling periods per year, use of EPO/FPC programs have been done). Never upstood why the CWB didn't go to daily cash pricing for feed barley over the years. Maybe you can explain why.

[TOM4CWB]

Wilagro & Agstarr77;

I don't quite get your point... if there was one to make.

1. The CWB is claimed not to be involved in the domestic feed barley market.

2. The CWB has not been interested in delivering daily cash price signals for feed barley... they have counted on pools to attract a supply for export.

What's the deal here?

A monopoly and "single desk" that has had no effect but to lower prices since the early 70's... if the pool was higher than the domestic cash price the CWB stopped taking deliveries so the pool would not be "diluted down".

Please try help maximise our returns for a change... STOP... Confiscating Wheat and Barley!

[charliep]

Issues around US corn imports will be no different after August 1 (assuming open market) than they were under single desk. US corn can be imported into Canada unrestricted. This has impacted and will continue to impact western Canadian feed grain prices.

Single desk supporters should hope for lower feed barley prices so the CWB can fill the 1 mln tonne short (not backed up by contracts with farmers) they have to the domestic maltsters at $50/tonne below the current market.

[agstar77]

Of course you don't get it T4. Free Barley won't be a higher price than enslaved barley. U.S. corn will dictate local feed prices as it always has and malt will also be influenced by by feed barley. Strange how feed can change to malt after it is dumped into the pit. The illusion of higher prices under an open market will soon disappear.

[wd9]

Amazing how there never is transportation issues around getting bulky corn to Canada! Between that and the CWB using cars as storage, amazing anything else even gets shipped.

[charliep]

agstar77

Just looking for clarification on the comment "Strange how feed can change to malt after it is dumped into the pit."

I think we can agree that the CWB is not involved in selecting malt barley - that role is solely that of the exporters and domestic maltsters.

What involvement does the CWB have when malt barley is rejected at the end of a crop year? Will the CWB represent a farmer when they feel their barley has been unfairly unselected/forced to go for feed? Will the CWB help the farmer find a new market? What will change in this regard in an open market?

[charliep]

Way off the original posting but here is the link to the threads/ideas on malt barley contracts that wd9 initiated a little while back.

http://www.agri-ville.com/cgi-bin/forums/viewThread.cgi?1176230846

Regardless of what happens on August 1, these ideas need to be reviewed/acted on.

[TOM4CWB]

Agstar77,

Interesting how you ignore the Western Grain Marketing Panel Report, CWB Commissioner Ken Beswick's resignation, and many other factual and real studies that prove you are wrong.

I know the mantra; don't confuse people with the real facts!

[charliep]

I missed the point of the quote. The assertion is that grain companies will take in as feed/ship as malt.

Would question in a quality system that is variety specific, how realistic is it that a grain company would buy from multiple suppliers without segration and create a blend that would be acceptable to a maltster (export or domestic)?

A farmer always needs to be aware of their crops quality and market on this basis. I suspect there will be more outside agencies that will provide grading and testing services in an open market so a farmer knows exactly what they have before putting it in front of selectors.