Forward pricing of peas

[mcfarms]

What is the furthest forward anyone has been able to get a bid on peas? I've been trying for over a month with the local line companies to get a 09 production bid without success. I have a couple other options I will try Monday but was wondering on others success rate on this.
Trying to do some early planning in regards to fertilizer needs and cost of production/return etc.

Seems most trading is going much past the march april 09 period right now.

[mcfarms]

should have read no trading is going much past march april 09 right now.

[cottonpicken]

Thats a long way off.
You think peas will sit around this price for that long?

[mcfarms]

CP

Frankly based on what I'm seeing in the wheat market no, that said 08 pea pricing's are avaiable in the 10 plus range into the spring of 09, If a person could and I say could lock in some 10 dollar 09 peas it may swing some canola acres that way. But saying I'm going to seed a wack more peas in 09 in the face of big N price increases without a price signal is a brave move. ( which is why maintaining ones rotation tends to be the wiser move most years) But if you don't ask for a bid you won't usually get one. Peas are really a bugger to forward price much past 6 - 8 months out and the price/ market signals from the end users are real difficult to ascertain as my command of the hindi lagauge is poor ( ok non existant) Wanted to see if anyone else was having better luck than me. Lots are talking that's what they will do but how many are just talking and how many are doing due diligence and seeking price direction.
Hard to pencil a COP when you don't know your end price range . Could be 9-10 could be 5-6.

[mcfarms]

I find the lack of a pricing exchange for this product that we can follow easily a drawback to marketing peas, getting better every year at the production side and believe I can market them pretty decently on average but they are still a bit of a guessing game at times for instance went and looked for the latest good article I could find on pricing direction for 09 this is one example of what I found, Its a week old from the economic times and gives some direction perhaps

"Mixed trends were noticed on the Delhi wholesale grains and pulses market past week. While gram moong (green gram) and rice were traded weak amid lack of buying support, pulses such as arhar (pigeon pea), urad (black matpe) and kabuli gram ruled strong amid firm advices from Yangon. Urad FQ spurted by Rs 130/135 to Rs 2790/2800 per quintal following reports of poor sowing and sharp appreciation in urad prices in Yangon. According to marketmen, heavy demand from Pakistan, Nepal and Gulf spiked urad from $ 620 to $ 670 per tonne flaring its landing price in Mumbai to Rs 2660/2670 per quintal appreciating urad prices in Delhi as well.

But a persons got to wade through a lot to get this info and decipher it.
"

[cottonpicken]

I was under the impression india had halted trading of certain pulses.I cant remember the specifics.

If this was true it was in a bid to contain prices.

But like all goofy government entaglments of the "market",this would only bottle the pressure-which would release at a later date,kind of like a coiled spring.

The variable costs of producing one crop or another is pretty negligable in the scheme of things.

I cant imagine wild swings,we'll see.

Peas imo are undervalued,the worlds protein needs is an interesting subject.

Dont forget that we are in a bull market.Pricing to far out is not a good idea.Some oil companies thought locking in 70 dollars was a good idea.We'll have are up and downs but the trend is up.

And........
The risk paradigm flips on you.
You think heck i'll lock my profit in now.
But your not.
Costs will escalate in the time frame between sales and production.
I could dumpster dive into the archives to prove this but i wont.

Lots were selling canola at 350 only to watch it fly to 700,and the costs also soared(naturally).

A one,two punch.

The guys that dont get a crop this year?

I hope for the best for them.

[TOM4CWB]

MCFarms,

In Montreal... at CSCA... we are trying as an industry to get through the marketing of the 2008 crop production this fall!

Since there are no futures or risk management structures to hedge risk... the best you could likely do to offset 2009 risk would be in soybeans and meal... if you were willing to take on the 'crosshedge' risk of using a very different type of produce to risk manage the 2009 crop.

Iraq, Iran, Turkey, these folks are all big time short especially lentil... and it looks like many EU countries planted wheat instead of pea. I see France is down 40% in feed pea.

Australia will be the next production area to shift prices... after we get our western CDN crop volume established.

It appears that we will have less than 15% greens... with the spread increasing to $4/bu over yellows. Few thought in early fall (08)yellows would be much less than $9/bu... and depending on the Aussie crop... a different complex next spring (09)

Red Lentil are trading well over $.45/lb... and recent hail storms have taken some big chunks of production of both pea and lentil out. Some Dry Beans as well.

If the C-W Peace does not get some rain realsoon... the better production areas could be at less than 40% of normal production... with Canola crops being written off already.

As C.P. says... those who hedged... could be in big trouble... we are in a new era... that few folks will forward hedge much... without an act of God clause.

Hope this helps a little!

[mcfarms]

Tom
Thanks
Really what I am asking for is to not to actually price any but to see if there are any prices or what the consensus of opinion is. Hard to believe but I'm actually doing my 09 seeding plans now as I have found a little "cheaper" fertilizer in limited tonnage and I'm trying to figure rough acres so I can get my blends in and in the right amounts ( approximately) In reality I have problably made a lot more money investing in bins than I have in forward pricing. That said I do have around 20 percent of my 08 pea production priced at 10.
Alway appreciate your insight TJ

[melvill]

Tom and mcf, just got of the phone talking to traders at two graincos that buy quite a few peas. When I asked for a price for 09 production, I could hear them picking themselves up off the floor. Reason was same story as Tom just mentioned - now way to hedge the risk except try for back-to-back purchase and sale. Of course that can't always be done which explains why the spread, sometimes called basis, between the producer and dealer-to-dealer sales is soooooo large. STAT reported on Friday that 'basis' for edible yellows was $1.13/bu last week. The 9-month average was 2.05/bu. or $75/t!!

[melvill]

Just talked to Pioneer Grain guy about fall 09 pea bids and he didn't think that was outrageous at all. He told me that he'd see if he could get a fall 09 pea bid now from their trader. He also said that Pioneer would have a fall 09 'program' out by mid-September, which isn't all that far away.

If I hear about something sooner from Pioneer, I'll post it here.

[mcfarms]

Thanks Lee,