CWRS Market signal

[TOM4CWB]

Dear Charlie,

To my staggering amazment... the CWB itself... no less... phoned Tuesday begging for 1&2 CWRS.

Now let me get this straight... A series 90% acceptance... B... 40% acceptance... and the C series is already open 50%. A month before it even closes.

CWRS seed sales are nuts. SOLD out in the last week.

SO Charlie... what kind of market signal are we getting? Is this logical... reasonable... justifiable...

It is certainly vintage CWB Whiteable!

Begging farmers for high quality CWRS in the first week of May... cause the CWB don't know where it is... or how to get it to the: 'big sale'... during spring seeding...?

I still don't hear the word 'premium'... from their crusty lips...!

[railway]

let them wait until july

[wade]

Why wait till July to deliver?

[Fransisco]

They're way behind in their marketing pace this year. If they'd actually taken into account the size of last years crop and marketed accordingly they wouldn't have gotten themselves into this jam where they're trying to play catch up through seeding. But no they decided they'd just do about the same as the previous year and here we are.

[charliep]

For what its worth, Statcan put out their March 31 stocks of Canadian grain report.

Total wheat supplies 33.2 mln tonnes, up 23 % from 2008. Wheat inventory (farm and commercial storage) on March 31 15.5 mln tonnes, up from 4.1 mln tonnes from same day 2008. Wheat in farmers bins on March 31 11.1 mln tonnes, up from 7.6 mln tonnes on Mar. 31, 2008.

[charliep]

second sentence should be up 4.1 mln tonnes, not up from. March 31 2008 was about 11.5 mmt versus 15.5 this year.

[furrowtickler]

Yes there was a big wheat crop last year, but there is less high quality wheat around than they thought. This has been known on the grass roots level since last november.

[charliep]

One of the places your comment does show up is in domestic feed use. Domestic feed wheat consumption was 4 mmt versus 2.4 mmt a year ago and 3 to 4 mmt in the previous 4 years. I always take domestic feed consumption with a grain of salt given a residule. Also may include some of the wheat used in ethanol - industrial use didn't increase that much.

Won't start a barley thread but there were warning signs about the impact of a smaller cow and pig herd. Domestic feed barley consumption 5.6 mmt versus 5.3 mmt in 2008 but well down from the previous 4 year range of 6.1 to 6.8 mmt during the first 8 months of the crop year.

[charliep]

always interesting to compare canola (an open market crop) to wheat (single desk).

Total supplies of canola in 2008/09. 14.2 mln tonnes. March 31 stocks - 5.8 mln tonnes. Inventory March 31 versus supplies - 41 %. Canola is moving out at about 1 mln tonnes/months - inventory on July 31 of about 2 mln tonnes or about 14 % of total supplies. Farmers made decisions about how much to deliver all through the year.

Wheat - Total supplies 33.2 mln tonnes. Inventory march 31 - 15.5 mln tonnes or 50 % of supplies. Based on CWB export targets and likely domestic disappearance - 7.5 to 8 mln tonnes likely to be used/exported. That leaves 7.5 to 8 mln tonnes of carryover on July 31. CWB via contracts/calls and farmers via delivery decisions will decide this.

[parsley]

Quite the comparison charliep. Gotta be
blind deaf stupid

all, three, to not inderstand the farmer impact rolling out of those numbers. Pars

[TOM4CWB]

Dear Parsley,

Be nice to Charlie... I asked... he answered!

I still don't understand why the CWB is in a panic!

If all these stocks are out here... why were they not put into place a month ago... to meet sales?

[charliep]

Actually agree with Parsley/not taken back.

Also saw an article from Canadian analysts (Informa Economics Winnipeg)
that would indicate the CWB is likely to exceed its export target (a good
thing) and bring the carryover number closer to 7 ( 20 % of supplies for
nice round number.

The point is a open market which is based on market signals appears to
do a better job of bringing supplies into the system to meet customer
requirements/utilize logistics efficiently than single desk with farmer
down loaded regulations including contracting, contract calls, hopefully
elevators with space and finally willingness to deliver even if the previous
3 are all in place.

[charliep]

Actually informa number likely close to 6 mmt or 18 % of supplies.

[pilpilsner]

Bullish news demand is building god I love my blackberry

[parsley]

It was a compliment Tom! charliep made a terrific post!

Play with your blackberry, pily, I believe it's making you kinder and gentler. Pars