Wheat! why our price is low.

[farmaholic]

Bucket, I am nothing more than a "simple" dirt farmer. Rely on the experts for advice or to give an educated debate...

When you fight a war on too many fronts you will likely lose the war but along the way you may win a few battles and as time goes by, you run out of resources and energy and hopefully raise the white flag before total annihilation and concede to the bastards...

I come here for insight on all sides of the argument.

[bucket]

Farmaholic

I come here to hear all sides. But no one can explain a zero basis and the fx.

You can't have 6.27 usd and a zero basis and end up at under 6.00cdn.

The formula is now futures minus basis minus an unknown to equal net cdn price.

[Hopalong]

Could be that Canadian graincos signed up basis and deferred delivery contracts earlier and are trying to honour these contracts.
Only way to slow new delivery contracts is unattractive basis or no bids.

[farmaholic]

Yup Hopalong, you're right. And so is Depape, its a signal. And hopefully that signal changes, but as long as the Beast is fed a steady supply, or never goes hungry, don't expect the signal to change. Then there's the Timfoil Hat theory which I like to wear and think there is some merit to as well.

[farmaholic]

ooops, I mean "Tinfoil" should proof read more...

[jdepape]

Bucket:

March Mpls at 6.27
Basis close to zero.
If Cdn price is less than 6.00 as you say, then the basis isn't close to zero.

Unfortunately, not all buyers treat FX the same way - can you say who's bid that is?

You say "basis is not right if you have to do another calculation after the fact". I agree - that's why I like the FX to be in the basis. Take the futures price (in USD), add the basis (which is often negative), and the result is a net price in CAD.

[bucket]

Depape

Just looked up the local bid on their app.

Futures price is 232 a tonne. Which is exactly mpls usd March price. Basis is plus .95 a tonne or 3 cents in I don't know which currency. And the net cdn price is 6.34 cdn.

Maybe you can make sense of it because I can't.

If they had a posted basis of minus 50 a tonne it would be more honest.

Although not long ago it was a plus 15 dollars a tonne. I missed that signal. My decision my mistake.

[bucket]

232 a tonne converts to 6.31 usd.

Just to be clear, if the basis of plus 3 cents has the fx in it, it's a pretty strange calculation.

[bucket]

Depape

Just check their app again so you can get which company it is.

233 equal 6.35 which is march usd mpls to the penny.

A minus 3.58 a tonne basis or 10 cents.

A net cdn price of 6.25 cdn.

All March futures.

Northern tier states have March mpls at 6.35 minus their basis of 25 to 40 cents for a net usd price of 5.95 to 6.15 usd a bushel. Convert that net price and you are at 6.90cdn.

System is working as well as when the cwb was in place and mandatory. And don't start on delivery opportunities there are none.

[jdepape]

I'm trying to figure out your 50 under.

If futures are 232/t, 50 under = 182 (4.95/bu). So that's not it.

If futures are 232 USD, converted to CAD at 1.1600 (0.8620 USD) means 269 CAD. Take 50 away from that and I get 219 (5.96/bu). Still not right.

Here's how I would dissect this.

Cash price is 6.34 CAD. At 1.1600, that's 5.47 USD. With futures at 6.31, your basis is 0.84 USD under.

Another way to do it is to convert the futures to CAD. 6.31 USD = 7.32 CAD. With cash at 6.34 CAD, the basis is 0.98 CAD under.

To avoid doing an extra calculation (like you said), most just imbed the FX into the basis. Take the futures in USD, add/subtract the basis (not USD nor CAD), and the result is a cash price in CAD.

I don't get your earlier post where you say "The formula is now futures minus basis minus an unknown to equal net cdn price." There is no "unknown" as you suggest.