Barley opens locked limit down

[AdamSmith]

"The proof is the proof, and when you see the proof, it's proven" ; Jean Chretien

[AdamSmith]

Front month Oct now bid DOWN $16.8t.

Make sure you take your Gravol, this is going to be like riding NASA's VOMIT COMIT,

[charliep]

Not related to the topic see Ukrainian feed barley price offer in the UAH 850 to 1050/tonne range (in today's e-malt newsletter which actually has a free subscription for basic market information). The conversion is UAH 5 to 1 US green back. That puts Ukrainian barley prices about US $190 to $200/tonne. Ukraine has their production problems and ongoing government involvement in terms of export lisences but given recent Saudi feed barley prices of over US $300/tonne, Ukraine could easily fill this Saudi/North African demand.

[charliep]

Same publication, European malt barley prices are currently about US $350/tonne (French 2 row), up from US $275/tonne a year ago.

[padron]

This is SO sad but SO true. Cash values for barley in western Canada are on a major plummet directly as a result of the federal court ruling. There can be no denying it. The futures markets have started to quantify the potential damage but the real proof will be in the cash markets - and that looks headed for a $30/tonne decline. On 10 million tonnes that's $300 million - right out of farmers pockets. It could be $500 million by the time the CWB are through with their marketing strategies and if we include the existing and future losses in the CWB malt sales book.

Has the CWB been subsidizing domestic feed markets? Inadvertently they have by posting low PROs and delivering poor returns against export market sales (See the Sparks study on the CWB sales track record versus yearly west coast values). They keep a lid on domestic values and the light has finally been shed on this injustice with just a few weeks of exposure to real world values. A thousand monkeys with a thousand typewriters could have performed better!

This is truly a dark day for cereal grain farmers in western Canada. Kudos to the federal government for trying to right a wrong that is long overdue for change. Shame on them for not reading the Act correctly but even more shame on those who stood in the way of progress and now get to share in these unnecessary losses. That's what you wanted wasn't it? Equal returns. Not good returns - just the same as everyone else. Ayn Rand is turning over in her grave watching this shameful display of selfishness.

[TOM4CWB]

Padron,

Obviously more than just barley is involved.

#1CWRS, was being bought out @$8/t, and being delivered at a good premium over the PRO, even before the last $5/t PRO decrease.

At a time of record high Milling Wheat Prices. This messes up the whole CWB system, as now they are REQUIRED to work to make each sale, even then they don't know IF they will get the grain. A DISFUNCTIONAL SYSTEM.

If barley is allowed to arbitage to world prices... feed wheat is affected as well. Compare the feed value of wheat, what will feed wheat decrease to match the barley devaluation? Double the value of the losses you calculated.

THis is why CWB Commissioner Ken Beswick resigned over a decade ago... the whole feeding industry in Canada has been built on a false feed grain value.

[craig]

Quote of the day from Ken Ritter.
Responsing to the drop in barley prices.This is because of a phychological change in the market place adding that the Wheat Board strategy is a long term one. The question to Ken is that strategy selling at well below the marketplace so that is easy to keep our customers. Barley down another $7.00 over night.

[charliep]

Where I would watch is cash markets. Cowboys/other livestock producers have basically disappeared from the scene. The export feed barley business that has been driving this market has disappeared from the scene. At the same time, you have farmers that are stuggling to empty bins ahead of harvest (am hearing lots of rumors about elevators with CWB July 31 year ends that are extending well into August and even early September) and newly harvested crop.

Southern Alberta feedlots have covered a lot of the Oct/Nov/Dec feedgrain needs with US corn.

Overlay this with what is likely to be a lot of sub 46 lb barley and you have the ingredients for lower prices.

The real interesting one will be malt. Farmers had a sniff at what the maltsters really pay the CWB during the last 3 months. I am going to be interested to see how enthusiastic farmers are in returning to the lower priced malt barley pooling world. This 500,000 plus of likely lost demand will all be available to the feed market. Overlay this with higher protein, less plump, low bushel weight malt barley and you have the maltster that is in trouble again.

The solution on the latter will be to import US malt barley - which is strange given the combination of less US barley acres, more US processing capacity in Northern states (Great Falls and the plants in Idaho) and the ability to supply their own markets as well as some of Canada. That should really make western Canadian (at least Albertan) farmers happy.

[charliep]

Likely the only one that cares but note the loss of carry on the Oct/Dec contracts western barley futures. Interesting.

[wd9]

Yes Mr Spock, it is intriguing. Hello from a far off country! What the hell did you guys do to the barley market for shits sake?

[Ron]

why cant the maltster just pay a premium for "feed" barley that meets their specs? screw the CWB.