CWRS BPC

[charliep]

You are right. I had forgotten to knock off the adjustment of $5.12/tonne. My math is the same as yours otherwise.

Also confused by the program until I remember the fixed price and other producer payment options are simply a value the single
desk buyer provides farmers reflecting their ability to manage risk around the CWB total payments. The fpc is not a real price.

The real frustration is this price is not available (as you highlighted) unless you can deliver. Sign a fixed price contract. Sign an "A"
series feed wheat contract. Hope that all goes well over the next six months. Why not a program like feed barley?

I can't explain. But a good question for the CWB director candidates. May take some off message.

[URL="http://www.cwb.ca/db/contracts/ppo/ppo_prices.nsf/fixed_price/fbpc-wheat-2010-mhrs-20101027.html"]oct 26[/URL]

[charliep]

The original posting was about the general fpc. I note (won't go through
the mechanics) that feed wheat calculations are somewhat different.

On other classes of wheat, you will need to follow when initial payments
are adjusted and how much. My suspicion is 1CWRS 13.5 will get the $70
adjustment payment and other grades/low protein the $50 end. If this is
the case, delivering lower/protein CWRS after the adjustment will result in
a $20/tonne lower price in your pocket.

With elevators plugged, you have no control over delivery. Suspect the
higher grades/proteins will move the fastest with even a guaranteed
delivery contract for 1CWRS 13.5 for the Japanese market a likelihood.
This will work against the pricing interests of a farmer who wants to move
2 CWRS 11.5 or 3 CWRS early to obtain a better spread on their initial
payments/a higher valued fpc.

[mcfarms]

Tom

This is what worries me on the feed wheat side of things it is set on settlement which may be in 6 days or 6 months the grain markets changing alot in that time frame anymore it seems. I would for sure be taking some of this level for the feed wheat but when this spread can change based on delivery it certainly gives me pause .



Feed wheat delivery discounts (spread adjustment)
A class specific feed wheat discount will apply to deliveries of No. 4 CWRS, No. 4 CWHWS, CW Feed and CW General Purpose settled on October 27, 2010 . Please note: a negative feed discount indicates a credit.

The discount according to your contracted class is:Feed Wheat Discount” is the value identified as such in the Pricing Schedule that adjusts the Fixed Price Payment set out in paragraph 6.b for
delivery of Feed Wheat based on the Settlement Date.

[bucket]

Just out of curiousity.

Why couldn't farmers just phone the elevator for a wheat price like canola. Sign a contract for the number of tonnes he wants to deliver and get to work.

These long ass discussions about how to figure out the fpc is non productive.

[charliep]

Can't agree more but unfortunately, these are the rules of the system you live in.

Business is being by the way. South Korea supposedly bought Canadian feed wheat for Cdn $308.25/tonne CIF (delivered S. Korea). Would have to knock off ocean freight and fobbing (ship loading cost) Vancouver/Prince Rupert. Price should be $250 to $260 ish in store.

[URL="http://www.albertafarmexpress.ca/issues/ISArticle.asp?aid=1000390507&PC=FBC&issue=10272010 "]feed wheat price[/URL]

[bucket]

So in the real world if a grain company was handling the sale, a farmer could get a contract done for about 5.25 net mid point sask. Paid in full at delivery.

With the cwb you might see it in 18 months.

[charliep]

Yes.

You get paid somewhere between 50 and 75 cents/bu initial (if you can deliver) and potentially up to $2/bu adjustment. So at best, you will have a 50 % down payment by January 2011.

I am going to offend everyone. Strange that everyone tells me how tough things are financially in agriculture and yet it can survive with this kind of cash flow/risk management. It must be nice to have $2 mln plus of equity and an understanding banker.

[TOM4CWB]

Charlie,

Elevator guys tell me 80% of the wheat in western Canada is feed.

A 1-2CWRS tender was offered by CWB last couple weeks... not 1 t offered.

So now our CDN feed wheat is being bought to deliver as 'Canada Western'...into cargo holds and being milled into flour by the importers.

Wow... we sure have come a long way.

[ado089]

But it's a strong feed not a poor 4.

[TOM4CWB]

ado,

13px... 62lb... 375 falling number. Feed wheat.