Factors You Are Watching/Strategies?

[charliep]

May as well start the week with the standard question to see if we can get some thoughts going?

My weekly process started with reviewing the charts over the past quarter. Perhaps was interest to me if October to December was a period of relative price stability (at least from the summer) and in many cases a shift higher - will leave for discussion as to whether the beginning of price move higher or a dead cat bounce.

Looking forward to a very interesting 2009.

[TOM4CWB]

Dear Charlie,

How soon do we get crop insurance numbers for the Revenue Insurance option?

Any indication of where they will be vs. last year?

[TOM4CWB]

Dear Charlie,

Did any payouts occur for the 2008 crop on Revenue Insurance?

I heard nothing... does that mean nothing was paid?

[Hopperbin]

No anhydrous price here yet. Was told mid Jan.

[charliep]

AFSC revenue insurance payouts for this last year can be found at:

http://www.afsc.ca/doc.aspx?id=1954

No payouts RIC. SPE paid out flaxseed and peas.

No idea what the new 2009 RIC values will be. What would you suggest? As a note the 2006 increase was 7 % across the board. Also note the RIC is not a premium as such but rather only pays 50 % of the difference RI values/fall price calculated AFSC price (decision has been made to make a 70 % payout during some years). Also tied to participation in/premium paid on the SPE program.

[TOM4CWB]

Where are you President WHITE???

Close pools to retain value?

HOW STRANGE!!!

Charlie our CWB is decades behind... in risk management...

But why should they worry... up to a 30% bonus is on the way (to CWB Managers)... for blowing our grain assets out... as long as they are spending 'enough' on PR programs...

P. R. Programs that tell us we are fools to look for premium values...

That the CWB has the 'power' to meet or beat the PRO... THIS 'premium' CWB self determined measure of greatness...

And everyone else that provide better prices to their growers... ARE CHEATING!

WOW!

I must be an Total IDIOT!

I DON"T BELIEVE (and have no indication) that the CWB is maximising our asset returns!

FROM THE IMPOSSIBLE AWB down under... a company that couldn't exist without the "single desk"!!!

"EASTERN POOL - Estimated Pool Return 2008/09 AWB Pool
($/t FOB, GST exclusive):



"Media Release: AWB lifts Wheat Pool returns, closes durum (31/12/2008)



AWB today increased its 2008/09 Wheat Pool estimates, lifting the benchmark APW grade $14 per tonne in the Western Pool and $17 per tonne in the Eastern Pool, with a range of adjustments to estimates for other grades. Durum wheat is the exception to this statement, with the market declining, and accordingly AWB has closed its durum pools in all delivery zones.

AWB General Manager Australian Commodities Stuart Richardson said the futures market for milling wheat had rallied substantially since the last pool update. Supporting this was that the exchange rate for the Australian dollar was slightly lower than at the time of the last pool update.

“Our estimates for milling wheat grades reflect the increase in current global milling wheat values,” Mr Richardson said.

“AWB continues to make physical sales to both the domestic and export markets. We have many existing international wheat customers looking to secure Australian wheat from AWB, so our shipping program is becoming well established.

“In contrast to milling wheats, the durum market has declined substantially and we have closed our pools to preserve value for those growers who have already committed their durum to the pools.

“Australian durum supplies are tight due to the poor finish in some durum producing areas. Prior to the recent decline, the domestic durum market rallied above international prices supported by this tight local supply and further buoyed by traders attempting to purchase durum to fulfil their commitments.

“Over the last few weeks the durum price has fallen as traders appear to have either paid up to purchase durum to satisfy their commitments, or washed out against the now cheaper Canadian durum which has been sold more aggressively into the international market to reduce Canada’s surplus,” Mr Richardson said.

AWB reminds growers that any of AWB’s pools can close at any time. Growers can secure access to AWB’s pools by contracting into them. This can be done through a local AWB Grain Marketer, or through AWB’s Grower Services Centre."

Pool Pay Grade Base Rate
Estimated Pool Return
Change



APH2 (13% protein)
$369
Up $17

AH1 (13% protein)
$364
Up $17

AH2 (11.5% protein)
$354
Up $17

AUH2 (Flat protein)
$337
Up $15

APW1 (10.5% protein)
$344
Up $17

ASW1 (Flat protein)
$329
Up $22

AGP1 (Flat protein)
$319
Up $17

AUW1 (Flat protein)
$294
Up $17

HPS1 (Flat protein)
$314
Up $12

AH9 (Flat protein)
$269
Up $17

FED1 (Flat protein)
$254
Up $7

DR1 (Flat protein)
$510
Down $25

DR2 (Flat protein)
$468
Down $37

DR3 (Flat protein)
$413
Down $42

WESTERN POOL - Estimated Pool Return 2008/09 AWB Pool
($/t FOB, GST exclusive):





Pool Pay Grade Base Rate
Estimated Pool Return
Change



AH1 (13% protein)
$358
Up $14

AH2 (11.5% protein)
$348
Up $14

AUH2 (Flat protein)
$333
Up $14

APW2 (10% protein)
$338
Up $14

ANW1 (Flat protein)
$337
Up $14

ANW2 (Flat protein)
$318
Up $14

APWT (10% protein)
$338
Up $14

ASW1 (Flat protein)
$323
Up $19

AGP1 (Flat protein)
$313
Up $14

AUW1 (Flat protein)
$288
Up $14

SFT1 (Flat protein)
$358
Up $24

FED1 (Flat protein)
$248
Up $14

DR1 (Flat protein)
$480
Unchanged $0

DR2 (Flat protein)
$450
Unchanged $0

DR3 (Flat protein)
$400
Unchanged $0













WESTERN POOL - Estimated Number Two Pool Return 2008/09 AWB Pool
($/t FOB, GST exclusive):





Pool Pay Grade Base Rate
Estimated Pool Return
Change



ANW1 (Flat protein)
$317
Up $14

ANW2 (Flat protein)
$302
Up $14

http://www.awb.com.au/investors/companyannouncements/current/AWBliftsWheatPoolreturnsclosesdurum.htm

[TOM4CWB]

DTN had an interesting article on fert. today:

Ken Johnson DTN Fertilizer Columnist

"Ammonia

The world ammonia market ended 2008 with extraordinarily slow demand. Just two cargoes were scheduled to load from Yuzhnyy at the end of December. Even that tonnage was not sold and was not likely to be offered for sale at current prices..."

Urea;

..."Through most of the month of December, there were an estimated 500 urea barges on the lower Mississippi River system. Late in the month, one trader came in for 10 to 20 barges when prices dipped below $200, and soon thereafter some domestic buyers needing product in January and February began to pick up a few units. By month's end, NOLA urea barge prices moved into the $215 to $225 range. Interior terminal prices for urea continued to fall from their lofty levels with new buying activity extraordinarily slow, even for the holiday period. We expect interior terminal price levels for urea to keep falling to get in line with NOLA prices in the short term..."

"DAP (diammonium phosphate)

The world DAP market continued to be quiet given the holiday season, with prices still very weak. No new export business crossed in the last two weeks of the month. U.S. DAP sold in India at $420 metric ton cfr (cost and freight), potentially netting back at around $390 to $395 FOB (free on board, recipient does not pay for delivery) Tampa, given current freights..."

"Through the month of December, NOLA barge prices dropped $155 to $275 but did recover slightly to around $300 at month's end. Falling grain prices are likely to only make the situation worse, as farmers must decide at some point what crop to plant and the fertilizing needs of the crop. Many farmers have built a fertilizer P and K "bank" in their soils, and spring fertilizing needs could be minimal, especially if wholesalers/dealers try to sell them very-high-priced fertilizers..."

"Potash

Most wholesalers we spoke with said potash supplies are more readily available and buyer interest is nil. We continue to expect substantial decreases in domestic potash prices in the medium term.

Ken Johnson can be reached at ken.johnson@dtn.com"

This is a very good article... DTN is worth much more than it costs... I use the Canadian Internet product.

[cottonpicken]

Canola and the 450 level.

[crusher]

I agree with cp, plus might be time to look at a diesel fill. Haven't parted with my fertilizer money yet. I think all commodities are going to move together, if I'm going to get bullish on canola, I'm going to be paying more for fuel & fertilizer.

Also thinking about new crop pricing; canola and wheat. Haven't heard anything on feed wheat, if I guy goes cwb, gotta watch the dollar now.

[cottonpicken]

Looks like were building for a gap up.
Cant believe the strength with the usdx rally.

[TOM4CWB]

Charlie,

I am starting to question whether a hedge on the CDN$ / US$ (long) isn't in order... It is hard to fathom how we can stay down this long... I see the AU$ is at a 3 month high over $.71.

[cottonpicken]

It is not out of the realm of possibilities that the canadian dollar could double in the next 12 months.

[AdamSmith]

Good post Tom, of course you can't compare this to Canada (actually it's as close as a comparison as possibly can exist, but I'm sure that will be the "talking points" from the cwb and its brethren)

The CWB can exist without its monopoly and can continue to offer its services to those who desire to do business with it. But just like Australia it will have to be legislated to compete.

We’ve gone through the “director election charade” and we can safely say that we now know exactly what we have already known for the last ten years. The farm community is divided between apathy and two polarizing positions.

Now its time for Steve and Ritz to quit F bombing around and get the votes required to pass competitive grain marketing legislation. It’s time for Ritz to grow up and start talking to Liberal MP’s, and find the dozen votes needed to pass the legislation. The time for childish ridicule is past. Dust off the task force report, rework it to fit the circumstances (wheat and barley must be done at the same time), go to Iggy and John McCallum, act like adults, and GET ER DONE.

The CWB will never initiate it themselves, even if our side wins more directors. It must come from Ottawa.

Farmers can decide what becomes of the cwb itself, but the monopoly is for Ottawa to decide alone.

[TOM4CWB]

A. S.;

Will be interesting to ask President White tomorrow... a few questions!

WCWGA in Winterpeg...7-9

See you there!

[malleefarmer]

Tom the AWB have turned into a super competitive company, there pools lead the pack by far and there cash prices are usually the top of the tree as well.
Would suggest they still got 65 to 70% of the wheat in aust.

Marketing nothing absolutely nothing has changed if you wish to pool wheat you can with the choice of around i think 14 pools to choose from and cash markets with probably 25 buyers

cheers