As the futures have climbed, the basis in my area has been creeping up as well. Can I deliver on a western barley contract into lethbridge? What about feed wheat and canola? The new wheat contract has delivery where? Would there be a premium depending where you deliver. Thanks for any info. (If I have to load a super-B to haul my grain past my closed elevator to a high thoughput why not keep the truck heading south and keep some of agricores basis)?
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Ron,
On the feed wheat contract, I found that the delivery is supposed to be at inland terminals, but they really want an arm and a leg to take delivery!
$12/t cleaning and elevation
$4/t profit!
Edmonton is supposed to be $5/t over the feed wheat futures, as like canola central Sask. is par delivery.
I went to local feed mills, but they believe this higher price is a bluff.
On top these feed users must pay to get the feed wheat back out of the terminal, and then pay freight to the consuming point.
Everyone knows noone cleans feed wheat!
There is big room for the basis to narrow, and a personal relationship with the feed industry could pay big dividends now!
Central Alberta has had Barley bids of $3.20/bu for off the comine, and $3.33 for January delivery, so it looks like carefull checking could pay big rewards!
Delivery on barley futures can be done, Charlie or Lee, maybe you could run through the process?
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Just a note to high that Winnipeg Commodity exchange site (WCE.MB.CA) has an area on contract specifications/delivery areas.
With a note on feed wheat, it is a fob elevator contract (loaded rail car/truck out of a designated elevator) so you responsible for an elevation. Grain companies don't like to loose control of their storage facilities so they jack their costs to be prohibitively high to discourage delivery against futures. An interesting question in my mind is can a person use their condo space in a terminal as storage for futures but that is something I would have to do research on.
Your point is well taken Tom4CWB as to why it is better to go direct and cut out all the middle men. Dealing direct also means the end user is likely to pay for and get a product that meets their needs better.
I will leave the western barley for another go (have to do some homework to remember all the details). I looked at the WCE but didn't see any description.
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Tom those numbers for barley seem higher than what I've been getting quotes on. Without doing at least a little homework, were these markets five miles west of you or at another location. I've been shopping some CPS wheat for feed for the spot market and the line companies are priced equal to the feed mills (that really bugs me) - any thoughts.
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I looked into delivery against the barley futures a couple of years ago and wrote it up for Alberta Agriculture's Marketing Manual. It might be a little out of date but the general principles/steps should still be relevant. You can find it at:
http://www.agric.gov.ab.ca/economic/marketing_manual/grains/grains_m11.html
As has been discussed here, there are lots of hurdles. However, the first two steps are -- you need a co-operating broker and a co-operating grain company.
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Crusher,
These were Red Deer south reports on feed barley prices.
Feed wheat prices of $3.80 fall delivery Edmonton are maybe doable, but it is a big question in our area how much CPS will yeild!
When CPS wheat is headed at knee height, blasting of the top of heads can be seen on a drive by ay 80km/hr, how much and at what price is reasonable to sell?
We are certainly not out of the woods yet on moisture to develope what is left!
Winnipeg feed wheat futures are a good indicator, but basis levels must narrow before I will sell anything, what about you?
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