Even France is outselling the Wheat Board

[Fransisco]

from Agriweek

The big sell

The Wheat Board says it needs
more wheat, quick

Even France is outselling the Canadian Wheat Board in the world export market for wheat and barley these days.

French non-durum wheat exports to Feb. 28 in the 2008-09 crop year that began Aug. 1 were 9.6 million tonnes to the Wheat Board’s 7.5 million. French exports are up 45% over 6.8 million a year ago vs. the Board’s 10% gain. French barley exports are 3.0 million tonnes, up from 2.5 last year, while the Board’s were 745,000 tonnes, down from 1.84 million in the year-ago period,when private exporters were briefly in the market. About 60% of French wheat exports were to destinations outside the EU.

But just you wait. The Board said last week it needs heavy deliveries of upper-grade wheat and durum through the end of May in order to meet sales commitments. Seemingly touchy over suggestions that it is not exporting grain in amounts proportional to the big increase in 2008 production, it has been going out of its way to proclaim that it is doing exceedingly well.

<b>Using meaningless previous multiyear
averages</b>, the Board said it has been taking in above-average amounts since October. During the spring seeding season farmer deliveries average about 250,000 tonnes of wheat per week. This year the Board needs 350,000 per week. The apparently late spring this year could compress field work into a shorter period. Well, let’s see. From the start of the crop year to March 29 off-farm deliveries of western wheat including durum were up 19% compared to a year earlier at 13.5 million tonnes. Wheat Board exports were up 7.5% at 10.52 million. Exports were 78% of deliveries compared to 87% a year ago. Producer deliveries of nondurum
and durum wheat have averaged 386,000 tonnes a week and exports 300,000. Since October, when the Board says things picked up, wheat exports averaged 328,000 tonnes a week. Commercial stocks of wheat at the end of March were 21% higher than a year ago at 4.35 million tonnes. The Board controls the entry of its grains into the commercial system through contract delivery calls.

If the Board plans to ship out 350,000 tonnes a week through May, weekly deliveries of 250,000 for the six weeks of the seeding season would draw commercial stocks down by 600,000 tonnes but still leave them significantly higher than a year ago. A shortened seeding season should actually make things better by reducing the number of low-volume weeks.

It is hard to see a supply crisis unless there is much heavier export movement than 350,000 tonnes aweek. If there is, no one will be more delighted than prairie wheat growers
whose bins are still crammed with 2008-crop wheat. If not, maybe what we have here is another selfpromoting Wheat Board publicity scheme to deflect criticism, which the Board continues to seem to think that it is above.

[Fransisco]

Looks like its time to start pricing out some new bins.

[Fransisco]

In related news, "Canadian canola exports will easily set a new record this year."

[Fransisco]

Moving on to Malt Barley, again from Agriweek.

BTW- A big thank-you from my hogs to the boys and girls at the CWB for keeping barley prices down while corn is rallying. My neighbors cattle also send their regards.

CASH PLUS: HOW NOT TO TRADE IN BARLEY

The domestic malting barley market in the west has been in complete chaos since the Canadian Wheat Board decided to close the 2008-09 pools and direct all trade through its quirky Cash Plus program. <b>There are increasingly frequent and believable reports that malt companies are cancelling Cash Plus contracts by refusing to accept barley because of real or alleged quality issues.</b> With the pools shut down, there is no other outlet for malting barley except the feed market, where prices have recently been declining. Barley prices have dropped since many of these contracts were signed.

Older Cash Plus prices are in the $325-a-tonne range. The latest Wheat Board pool return outlook price for two-row barley for 2008-09 is equal to $252 a tonne in Saskatchewan. The Board sets minimum prices for Cash Plus contracts, now completely out of line with the Board’s own pool return outlook price predictions. The Board has unilaterally created a two-price market for malting barley, at a time when it is the only buyer and the only seller. It is not surprising if domestic malt companies are unwilling to pay the higher of two prices.

<b>The Cash Plus scheme involves three agreements per transaction: one between the Board and the grower, one between the Board and the buyer, and a third between the buyer and the grower. The contracts were written by the Board, and in order to be acceptable at all to the malting trade had to be very favourable to the buyer.</b>

The malting company solely determines whether a given lot of barley meets is quality specifications, which it can set and change with minimal reference to statutory grades. Delivery can be declined by the company without incurring a penalty on quality grounds even if all other contract terms have been met.

Many growers complain that Cash Plus barley previously accepted for malting is not accepted when delivered because of quality problems. Undoubtedly in many cases these are legitimate and originate with growers. However <b>the conditions of purchase and sale, complicated by the presence of the Wheat Board in the equation as well as contract terms, make it much easier for buyers to get out of paying prices which have become uncompetitive.</b> The Cash Plus scheme also violates the principle that the Board should be supplying barley to the domestic malt trade at prices that are competitive with export prices and with what U.S. maltsters are paying.

It is highly probable that many domestic Cash Plus prices are not competitive by this measure. The only kind of contract that works in this business is one between one buyer and one seller. No intermediary need apply.

[Fransisco]

"The contracts were written by the Board, and in order to be acceptable at all to the malting trade had to be very favourable to the buyer."

Yup, the Board is really working for the farmer.

[furrowtickler]

Good diggin fran, I have said this for six months - there is a very low world wide supply of high quality wheat regarding hrsw and we have been told to deliver only 80% and the pro's have dropped every time until the last one. The majority of the farmers are pissed at the boards performance and the incompetance of the major marketing losses in '08 - and now they are begging for deliveries, wth.

[parsley]

If you deal in Superstone, you hae probably bought baguettes.

If you've ever noticed, the flour the baguettes are made from, originates in France.

Yup, France.

No problem for a French farmer to haul wheat or flour into Canada. But, as Western Canadian farmers, are we allowed to ship our own grain into France?

NOPE!

Pars

[carebear300]

With the frost in the states, hope we didn't sell our surplus cheap like usual. The market may be due for a big bounce upwards. Hope you all are having a good easter weekend.

[Fransisco]

And if you dig a little deeper into the french wheat used you'll find that it has the exact same properties as one of our most common winter wheats, Falcon.