Different Marketing Meetings with Different Elevator companies?

[SASKFARMER3]

Did a Richardsons last week and Cargill
today.
Wow are their different presentations.
I hate the CWB all know this but these
meetings about the new wheat world were
so different I need help.
Cargil is proceed slow this is whats
happening with world wheat markets.
Breaking down grading etc. They use a #2
13.5 protein.
Richardsons and Vittera was #1 13.5 and
its like marketing Canola.
Funny I use to believe it will be like
canola but maybe changing my tune.
See canola basically is either a #1
shitty #1 or Sample they dont want it.
HRS is 1 2 3 with all protein spreads
down to feed wheat.
We grow HRSWheat most of the world grows
HRWWheat. So are we going to switch.
So which group has it more correct.
One thing is knowing what protein you
this is going to be very very important.
Might be days your sent home because you
signed up for a #2 12.6 and you have #2
11.8 just an example.
Lots of questions but its still going to
be fun.

[bucket]

Why is ICE contracts based on a 13.0 CWRS and 12.5 CWAD??

[Burbert]

Protein machines are mostly inaccurate, at
the best of times. Yup wes Comedians love
a challange. The tougher it gets the
better wes like it. Due the words
tokeage, and stealage mean anything at all
to you geniuses?

[farmaholic]

As I've stated before, I think it will be important to know what you have before you market the mystery. I will grow it and determine what I have before I sign contracts. For those of you who want to gamble that is your prerogative but don't complain if you don't like the size of discounts or premiums(hopefully there will be premiums for above spec) either way. Hang on Boys-that's one ride I'm not taking. Why would anyone give the buyer that much power?
One drawback is the possibility of missing out on an attractive price realitive to a future price. But the complexity of wheat/durum grading will likely keep me on the sidelines and avoiding the risk of excessive discounts for off spec.
That being said, if there are grade and protein discounts/premiums written into the contract or a way out if it doesn't fall within certain parameters of the contracted grade, I may just sign.

[$short]

The grading system will change as we progress
further along the open market path. People are
still under the assumption that the grades will
remain the same as we know it today.

Wheat grading will become a spec based system
for the most part. It will all come down to price
paid for certain spec wheat.

Canadian mills will want different wheat than say
the USA. China will be different than Japan etc.
They also pay more or less for certain attributes.

I think these patterns will be figured out the farther
along we get. Distance to the export destination
will determine what we grow where.

[mbratrud]

We really need the new futures contracts to work or at least have it clear ASAP if Companies are using ICE or MGE on HRS for example. That way producer's can sell futures through their trading accounts to lock in desired price. Then shop for best basis and spreads, once they know what they have post harvest.

Farmers should be getting behind these new futures contracts as much as possible, as it is our best chance for a transparent market. Focus on learning and understanding the following. What the futures contracts mean, what the delivery rules are, and what a good basis should be. When you ask for prices ask them what basis level they are using and off of which month and what futures exchange.

Farmers that don't have a trading account should get one, and if you don't understand futures, find a broker that understands you want to use your account as a pricing tool, and not speculation. Tell them you will need their help. Also find a neighbour or someone you trust that knows and understands futures to help you through the process, until you have a firm grasp.

We only have 1 crack at this. If farmers demand that these new futures contracts be used and use the contracts themselves, Grain companies and Millers will be forced to use then as well.

ICE needs to make sure they are open to adapting their contracts, I have already heard from millers that are concerned with taking delivery of a #2 Durum that has a 60% hard spec when they want 70%. There are going to be small challenges like this and our grading system is undoubtedly going to change. Probably a loosening of #1 specs to somewhere between a 1 and 2 as this is what millers are looking for.

For now though my advice to producers is find a #2 price or basis you can live with and stay away from pricing a number 1 for now. Better yet like I said before do your sales through futures contracts until you know what you have? Like Canola don't price more than you are comfortable with.

Make sure you understand Margin calls and rationalize with yourself the mechanics of the contracts, so you are not scared out of the Market by a short term spike. If you have 1000 bushels of Wheat in the bin that is priced at $6 and the price goes to 7, you have essentially missed out on $1000. With your trading account if you sell 1000 bu of your wheat and $6 equivalent and price goes to $7 you have to write a check for $1000. The result is the same but emotionally writing the check is harder than just having a lower value inventory. This is the biggest struggle you have to overcome if you start using futures as a selling tool.

That’s my 2 bits.

[agchat]

Not trying to be an ass here Saskfarmer, but do not forget that the complex wheat grading was brought on but who? Yes us farmers. We wanted to be payed for that extra fertilizer that we used and the neighbor did not. After all rule of thumb, higher nitrogen equals higher protein. Sometime complexity can lead to frustration. Lets not panic it will all work out.

[wd9]

Does it make bread? Simple grading.

[malleefarmer]

All contracts here are multigrade rather than fixed
but price is usually $2 less or you can take fixed
grade.
Most just deliver there 2 or 3000 tone whatever
to the elevator then allocate loads afterwards via
home computer.
Plus wheat swaps with banks so one isn't faced
with margin calls throughout the life of the
contract just at the end would be a useful tool to
Canadian farmers

[sumdumguy]

Think the doors should be opened to licensed
and bonded marketers to start test runs and post
results?