Wheat contracts (Ontario)

[charliep]

On the freudian slip front, you might want to read page 14 of this week's Western Producer (August 20), you can see comments on the PPO contingency fund which is apparrently back in the black. Will be interesting to see where the money came from in the final report (cash trading feed barley, EPO premiums, wider basis on fpc, profits on the flexpro program, etc.

Also note Brian Otto's letter to the editor on page on barley - a well written article that asks some good questions. Will leave malt barley alone (dealt with better in the editorial that I can) but I have to raise some of the frustration on the cash trading of feed barley. I hope I don't see a line in the CWB annual report that shows profits on feed barley sales transferred to the PPO contingency. I have to highlight the moral issue of wealth transfer and the impact of poor market signals on the domestic feed market.

[charliep]

on page 11.

[charliep]

Sorry for taking off topic dalek but have to admit I find the mechanics of CWB programs interesting/like to roll up my sleeves and tear things apart.

So the CWB pay off a 30 mln deficit in the PPO contingency fund. From the year end report, western farmers used about 2 MMT of PPO programs in 2008/09 (about 600,000 tonnes of FPC, 1 MMT BPC, 250,000 ish flexpro and finally 300,000 tonnes plus/minus EPO). Everyone who participate in the 2008/09 PPO programs contributed about $15/tonne to the overall reduction in the contingency (not counting cash from other sources like cash sales and interest earnings) or 40 odd cents/bu.

PPO programs amounted to over 6 mln tonnes in 2007/08 (including 650,000 tonnes of DPC program).

Apologize for being off topic but don't want to start another thread.

[charliep]

As a heads up, one place farmers really need to pay attention in the coming settling of accounts for PPO/pooling years is malt barley cash plus. The accounting for the cashplus is not done separately but rather in the overall contingency fund. There needs to be strict accounting and audit trail to be sure all the extra cashplus money (your last 5 to 10 % benefit) is distributed to the people who used the program and not lost in paying down the contingency fund deficit.

[dalek]

Nothing wrong with a good discussion Charlie.

[charliep]

More current prices reprinted with permission from ProFarmer Canada (Mike Jubinville - Pro Farmer Canada 204-654-4290 or send an email to mike@pfcanada.com.)


Start quote -
1) Wheat Ethanol Comment

Received a number of grower responses to our inquiry yesterday on
ethanol plant offerings in the wheat market. Prices noted below are a
ways back from the offering quoted yesterday from a grower in northern
Alberta...but here are a couple of the comments...

1. Minnedosa Husky was paying $4.22/bu for Sept delivery on Monday for
15.5 moisture and they don't care about mildew or sprouts which may be
a problem with the CWB.

2. Delmar Comm. in Gladstone MB is currently offering 3.85/bu for
CWRW. I told the manger that I would price some (I am thinking at least
1/2 of what comes off the field) at 4.00/bu. It would be great for bin
space to not have to consider the usually slow calls from the CWB. The
manager at Delmar was going to talk to head office, but he thought 4.00
would be attainable.

3. Initial price offering at yesterday's Northwest Terminal plant open
at Unity, Saskatchewan was $3.80 to 3.90/bu


Again...these bids are well back from the $4.70/bu quoted in
northern Alberta (Peace District)...but down around $4.00 I suppose
splits the difference between the current PRO (which is likely to fall)
and abysmal Fixed Price Contract price.

end quote

[charliep]

dalek

Likely need to look at corn prices to understand our mid quality wheat price in Alberta. CBT close yesterday $3.24/bu (Dec.). Basis to Alberta track - 75 cents (assuming 25 car or more rail shipping). Convert to tonnes and Cdn dollars - Cdn $175/tonne. Add $10/tonne trucking rail siding/facility to ethanol plant/feed mill. Voila - $185/tonne or $5/bu if you prefer.

for albertas/others - this is based on a high quality/plump #1 or 2 grade with good starch content/opportunity decent ethanol yield - not frozen low 50 lb/bu wheat.