New Crop Pricing Opportunity

[charliep]

Just a note all WCE markets are moving higher over the past week reflecting concerns about hot/dry conditions across many areas of western Canada. If you haven't already forward priced at least some of your crop, I would put everyone on alert to do at least some. My guage is you should have enough forward prices to cover between a third (strong balance sheet) and two thirds (financially tight situation) of Oct./Nov. cash flow needs. A new factor to consider will be plans for calves this fall if you are cow calf and normally sell in the fall but plan on backgrounding.

Canola and feed barley are crops that need to be forward sold most agressively in here. If basis levels are to ugly, then sell futures and leave cash pricing till later.

A final note is to follow the CWB fixed price and contracts. The 1CWRS 13.5 fixed price was $206.86/t yesterday (port) or an Alberta price of $4.40/bu. Current July PRO is $195/t (port) or $4.10/bu (Alberta). The basis is $16.99/t over the converted MGE futures prices. I like the idea of having 25 % of my CWRS and SWS production priced straight off the combine with the choice of fpc over the next 4 days or at least lock in the basis. I wouldn't use these programs for CPS or CWRW. Would also give the durum fpc a pass.

What are others thoughts?

[TOM4CWB]

Charlie;

Why a pass on the CPSR and CWRW?

[charliep]

My issues on CPS and winter wheat are I am not as confident/satisfied with using KCBT as a pricing point for these grades. Anyone who uses the producer pricing options for these grades exposes themselves to spread risk between KCBT and MGE. This risk can work both ways.

With the exception of using the CWRW special contracts, the non board feed wheat will also pay almost as much as the CWB pool returns. In an area where I didn't have an active feed market, I might give stronger consideration to CWB PPO contracts.