Harvest Progress

[crusher]

The combines started rolling on our farm at Fort Saskatchewan yesterday. We were doing peas along with lots of wild oats and cleavers. Markets are currently at $5.20-5.25 in my area. I was going to sell 50% of my production, the yields will probably be okay - 90% of average. Is $5.25 the going price, or is there higher bids out there? Which coast is this big pea movement going to? Will prices be higher the further you go east or west?

Started swathing canola last week and should do the balance this week. Crop looks okay - average yields anticipated. Looks generally disease and bug free. I sold to 40% on the way up and will probably bin the rest. With respect to Kasro's comments on reownership - I would wait until the trend started going the other way. My guess is that many farmers didn't do much pricing at the $7.50 - 8.00 range and they think that those prices are attainable in the near future. They will probably delivery their contracts and then place more on 90 day storage waiting for the market to recover. I think it is a little risky, but there is not much carry in the market so might workout okay. What will hold more weight - The Stats Canada report or the weather in soybean country?

My wheat is still a long way off. Some of the really late stuff looks great but still has a green color to it. Looking forward to another week of heat. Was happy to see MGE wheat finally have an up day. The PRO spread narrowed in on CPS vs HRS, is there any strategy with respect to fixed price contracts? I suppose not unless they make interim payments - or does that have any effect on how the payout goes?

I hope you all have a safe and enjoyable fall. We could be doing a lot worse things.

[charliep]

Crusher

I agree with your strategy. I have heard some yellow pea prices (I am assuming this is the type of peas) closer to $5.40 to $5.50/bu but not available everywhere. Demand out of S.E. Asia (India mainly) is driving the market so will be west coast shipment. It is at the top of my mind because of an article I am working on for Alberta Pulse Growers but need to ask the following questions: 1) the price you are getting - is that picked up yard or delivered plant (if the later what is the transportation cost), 2) what is the percentage splits/small seeds, etc in your sample/how are they priced? 3) When can you deliver and how soon will you be paid (delivered within two weeks and paid at unload or some other arrangement). 4) What is the local feed mill/hog market paying for feed peas? Just encouraging everyone to work price offers back to today's farmgate to get a good comparison of alternatives.

On the canola front, I would discourage using a 90 day differed pricing contract. My experience with grain companies suggests that they will maintain wide basis levels this fall (particularly if futures rally) but use premiums to attract deliveries. The premiums will only apply to new deliveries so you can't pocket them (normally) on already delivered crop held under a 90 day unpriced contract. I would negotiate basis/tie it in before I would commit or sell canola/look at replacement strategies (you can likely add benefit in terms of narrower basis levels to enough pay for a call). I will let Tuesday tell how the market will react.

On the wheat front, just a reminder that the relevent spreads are still the ones that apply on initial (unless adjustment payments change them). I wouldn't look for these adjustments until at least November (maybe even Jan.). The CWB has built in optimism in their PRO and the market needs to improve to make them a reality. As a strategy (reflecting the wide spreads on initial payments), I would use the fixed price contracts on the higher quality CWRS wheat and either go with pool returns or the domestic feed market on CPS. On the domestic front, tight feed barley supplies (stay tuned Tues.) will mean a lot of feed wheat used in domestic rations. I can see feed mill bids for feed central Alberta/Edmonton area in the $3.50 to $3.75/bu this winter with $4/bu a distinct possibility if their is any increases in feed barley prices.

I look for others thoughts on these ideas.

[charliep]

How is everyone doing on harvest progress? How are actual yields/quality (protein on CWRS and CWAD as well?

[cowman]

In the Red Deer area the barley is coming off with fairly mixed results, which isn't surprizing due to the spotty nature of the showers this year. The two row barleys seem to be doing a lot better than the six row. Some Thompson barley went around 90 bu./acre and some Dolly went over 80. Little wheat harvested yet but it really looks good. Most canola doesn't look all that great but I haven't seen anything done yet. The two row barley is really weighing up good and is excellent quality.