$3.50/bu barley

[btjadenlepp]

i'm told that the recent sales to saudi arabia were done at around $US220/t fob west coast. with full margins, this should net $3.50/bu in most of sask, possibly a dime or two higher in certain locations.

in other words, this is the current world market equivalent value of feed barley. it's been interesting to see since the export sales have been made that the domestic end users have finally started paying up for new-crop. last week i read $4/bu dlvd into a feedlot in lethbridge was available.

this and the sask feed barley prices still represent weak basis levels against the new wce contract specifications, compared to the delivery option. this should sort itself out in time but for now, basis levels are hugely variable depending on what market the local buyer is selling into, kind of like how non-futures-traded cash markets trade back-to-back.

malt premiums at $1/bu over are not bad, historically and given the outlook. we're thinking they'll probably narrow into 07/08 either via higher feed or lower relative malt prices.

hope that helps. we welcome calls on what an individual farm should do about this at 204 832-2133, ask for Brenda or Darren, or email brenda@farmlinksolutions.ca.

[charliep]

Off topic but will note the collapse in corn again (better forecast in the mid west). To calculate a landed Alberta price, take corn futures, add about 70 cents per bushel for basis (need to check to ensure basis is current/reflects the market), multiply by 39.368 (convert to tonnes), convert to Canadian dollars. This value is track so need to add trucking to feedlot/feed mill.

As indicated before, corn price will be a factor limiting barley prices over the coming winter (unless something happens that impacts US corn yields).

[charliep]

I will try asking here again, I tried in a different post, but other than Barleyman all I got was ignorance.


What are guys hearing in their area for Feed Barley prices?

What about Malt prices?? I saw that the CWB pulled there prices off the website. You guys hearing any numbers right now??

[charliep]

Prior to today (Western Barley down limit), barley prices I have heard in Alberta match Brenda's above. $3.50/bu to maybe $3.75/bu central Alberta. Lethbridge about $20 over futures (still a wide bid offer range). Malt a buck a bu over feed.

[btjadenlepp]

snappy i was trying to answer your question, hoping that starting a new thread would re-focus the discussion.

i could rattle off a bunch of cash prices but not knowing where you are selling, thought it more useful to know that US$220/t fob is where the market is at. convert that to canadian dollars and back it off to your local delivery point by the costs to ship/handle to vancouver, and you should be within a dime or two of your best local bid.

as charlie notes the situation could be different today, especially in southern alberta.

[charliep]

Just to add, the current bids are very much demand based - exporters trying to get a signal to farmers to get them to deliver/fill the boats destined for north africa/middle east. Once these sales are covered (plus any additional business that is done), I would expect elevator bids to slide (other things equal).

The domestic livestock guys (as Brenda as indicated) are paying more attention/starting to forward book into the fall but in many cases will stay short. In some sense, $4/bu barley southern Alberta versus corn prices that are competitive with barley/dropping and at least some probability of weather related quality problems in western Canada (ignoring the impact on yields) will drive this. Who will win the fight over prices - no idea. Will note the profit situation on the cattle/hog side is not nearly as good as on grain/oilseeds (realizing that yield and quality stories have not been told yet for the grain farmer). I think the cattle/hog guys would gladly trade you market outlooks.

[just_wondering]

brenda were these CWB sales/acredited exporters or open market "free" barley.
I am still having a hell of a time locking down my local pioneer on delivery location and dates for their program.

[btjadenlepp]

what i heard was the sales have been made outside the board, but optional origin. so if the monopoly stays in place here, presumably the seller could try to originate the barley from some other country.

i'd recommend you call all the different elevators, within a wider radius of your farm. i think companies are planning to designate certain stations to specific programs this year, so maybe your closest jri is simply not going to be a barley house this year.

[Burbert]

Nobody knows what is going on, because of cornfusion! Right now all the broker boys/girls are on holiday. Our grain company friends are waiting for due process, before committing. Rumors and BS are the order of the day. Weather is hot, hot, hot, making framers angry and cornfused, cause they aren't at the lake too!!!! $3.50 bu barley is everywhere, everywhere, same price it was in January 2007. $4.00/bu in Southern Alberta, but you got to find a buyer and then gett it there! Truckers ain't cheap, they now have fuel surcharges, I am told. Here's a novel idea, how about a grain surcharge, yeah right on brilliant!!!! Best idea in a long time, to come down the spout.........

[charliep]

Burbent

Realizing you did not grow barley this year, would you accept a bid of $3.50/bu straight off the combine - cash in bank Sept./Oct. and no bin space/storage risk required? You will either say yes or no. What is confusing about this?

[Burbert]

Yes, I would sell $3.50 bu barley off the combine. But and its a big BUT, there is never any elevator space in the Fall, therefore, storage is ther real reality. Nice to think/talk about selling right off the combine, but it doesn't work, never has. Guess we live to far away. Location, location, location comes in to play. ** Sorry Charlie, I told a wee fib, we do have barley growing on our farm this year** All I can add, is business, is business, with all the cornfusion right now, maybe we'll luck out!!!!!

[btjadenlepp]

Burbert, whoever you are, I'll bet you an expensive bottle of red wine that all our clients' barley is moved off their farms in Aug/Sep according to the delivery window specified in the forward contracts at these prices we're encouraging them to sign.

If your marketing plan is to 'hope for the best', good luck. Without exception, we find that planning for the farm's needs and responding to attractive pricing opportunities that come along in a disciplined fashion, helps profitability and farm management enormously.

[Burbert]

btjadenlepp, I'll bet you are new to the farm marketing scheme. What we call a gunho type. Wow is all I can say, everything sold and gone Aug/Sep! A.... what will happen if you have a wet Fall and harvest gets delayed, or how about an early frost causing marketing issues, sprouted moldy rotted grain. I'm sure you have this all under control, cause you are such a shaker and a mover. Bet you never shoveled grain out of a bin in your life. No, no, wait, you are the Son or Grandson of a Saskatchewan farmer, that really knew his stuff, hence you know it all tooo... LOL pal, with your $3.50 off the combine barley.

[charliep]

I know btjadenlepp and I won't take that bet. My risk of loss would be too high and their taste in wine in beyond my threshold payment risk.

I find it interesting that 98 % plus of the time contracts like this are filled in the delivery commitment period. The less than 2 % they aren't, the farmer part of the deal just sits back and takes it. Sometimes there is a recognition that a business transaction involves give and take - a missed delivery period can be offset down the round with a blending opportunity. Sometimes it is because the farmer doesn't have the gonads to look after their interests and would rather just cry to the world they have been hard done by. A contract goes both ways. Everyone need to understand their responsibility in a contract and that of the buyer.

[charliep]

Burbert like I said earlier Blah Blah. All you do is blow smoke. And you just proved to me how big of a loser you are. You can't move grain off the combine because of space at the elevator?? That just shows me you are special. You don't know how to foward price grain?? My God. Mabye you shou;ld stop trying to farm in Flin Flon. (idiot)