Pool Return Outlook Day

[charliep]

PRO release this afternoon.

Any forecasts? Mine is down $20/tonne all wheats (including durum). No change barley (malt and feed).

[Zaphod]

I'd agree with you Charlie about the wheat, but I think barley will be down about $10. European malt barley has been heading south for a few weeks.

[Choice2U]

I have $52/acre in fertilizer on my HRS thanks to last years fertilizer prices. At $4.50 net, that's almost 12 bushels just to cover that bill vs 8 bushels on my canola with a much greater upside. If the PRO keeps falling, the only remaining option is to do a basis contract and hope the US market gets competitive from Feb to June of next year. Only problem is that one gets the intial price only, no interims until locking in the price. Hurts cash flow. My bet is on $25/mt.

[charliep]

One thing that is of interest to me in carry in the futures markets.

There is $14/tonne carry between the November and July canola futures contracts. I suspect you can negotiate a pretty decent basis for late winter/spring delivery. Not suggesting pricing but rather making the observation.

If you look at yesterdays fpc for 1CWRS 13.5, there is also $14/tonne carry between the December and July MGE wheat futures (converted Canadian $/tonne). The CWB removes this through basis (flat price) although they will pay you up to $4.50/bu storage depending on when you deliver.

Basis levels (including adjustment) are on the plus side these days for the December contract). Will also be watching the EPO values this pm.

[Zaphod]

The IGC just bumped up its global wheat production estimate by 8 million tonnes and corn by 7 million tonnes. Lower than last year, but moving higher.

[charliep]

Mistake alert. $4.50/tonne (not /bu). Added up the carry on the bottome of the FPC page dec to June.

[Zaphod]

We underestimated the Board. $26 for spring wheat, $31 for durum, $21 for 2-row and only $4 for feed. Too bad they're not in the feed barley market.

[charliep]

Ouch!!!

Choice2U - Your prize on wheat.

Zaphod - Split on feed barley but you get the malt prize (even though still optimistic).

DATE: August 27, 2009
GRAIN VALUES DECLINE IN LATEST CWB 2009-10 PRO
Winnipeg -- The CWB today released its August 2009 Pool Return Outlook (PRO) for the 2009-10 crop year. Wheat values have been lowered from last month's PRO by $19 to $28 per tonne, depending on grade and class. Durum values are down by $27 to $31 per tonne. Feed barley has dropped $4 per tonne, while malting barley values are down $18 to $20 per tonne from last month.

<a href="http://www.cwb.ca/dom/db/contracts/pool_return/pro.nsf/WebPRPub/2009_20090827.html?OpenDocument&CropYr=2009-10">August PRO</a>

[Zaphod]

Boy Charlie, you're just a linking maniac these days. Very helpful though.

[charliep]

Practice makes perfect.

Alberta Select two row at $168/tonne (plus other things like VIP, low protein, trucking premium, etc). Current feed barley price highway 2 corrider Edmonton south - $130 to $155/tonne (OND). Before anyone gets too bullish feed barley, would note the competition from malt barley (an ugly year and worst yet domestic maltsters impact) and craig's comments on demand above. Add in feed wheat with a frost and things ain't pretty in spite of a small crop.

[mbratrud]

This is what really bothers me about the PRO... They set the price for feed wheat at $2.60 average price per bushel in Sask. Prices had still been in the $4 range, if I'm a user and I read this my price would instantly drop to $3 and then sit and wait for a frost, when that hits go to $2.60. Why would they set prices like that. Same thing with Barley at $1.94??? last week there was $2.75 Barley still I can guess what they will be paying tomorrow. Whether they know it or not these Pros have and effect on the on the domestic cash market. These guys are working for us???? They should all be fired for publishing something like this. I realize the intent is to inform farmers, but they inform everyone else as well.

[charliep]

Interesting to look at the EPO premiums and offerings.

A fact to highlight is the fact that the CWB is not able to offer an 80 % early payment option for either CWRS/CWWS/CWES or any of the durum wheats - the PRO is too low relative to the current initial payment. There is an 80 % EPO for CPS/CWRS - about $6.65 premium.

The 90 and 100 % EPO for wheat ex durum is about $15 to $18 and $29 to $33/tonne repectively. A 90 % durum EPO is $27 while a 100 % one costs about $42/tonne.

<a href="http://www.cwb.ca/db/contracts/ppo/ppo_prices.nsf/epo/2009_index.html">EPO</a>

Now I have been trained on links, you don't know the monster you have created.

[macdon02]

Out of 6700ac seeded this spring I seeded 375 acres of wheat and barley, the board "sucks the sweat off a dead mans balls" stealing a quote from good morning vietnam. I vote with my drill they want more acres they have to work for it. One year out of ten doesn't make a world class leader.

[Choice2U]

I'm not thrilled with the "win".

[Fransisco]

Great quote! LMAO

But what's the one year out of ten? As far as I can tell they've got a perfect record.