KAP's Questions

[AdamSmith]

I suppose this is just opinion too!

On the basis;

On Oct 13 I did a basis contract for 18000 bushels basis was 7.91/t over with a deposit to the pool acount (Adjustment factor) of 5.75/t for a basis of $2.16/t or 6 cents a bushel over Minn. I also pay $55/t in freight and elevation.


If you notice below Cash bids in Minn were 28 cents over December.

Bottineau ND Wheat was bid at 60 cents under Dec Minn. (68cents C$)

My Price was $1.44 C$ under.

I'm losing 76 cents on basis (the cost of our system) or$28/t (Oh my gawd, it's worse than I thought)


MS_GR115
Minneapolis, MN Thu Nov 02, 2006 USDA Market News

Minneapolis Weekly Grain Summary

Prices for the week ending Thursday, November 02, 2006

The Milling Spring Wheat cash market was slightly higher. Movement was very
light this past week as farmers were more concerned with their row crop harvest
than marketing their spring wheat. There has been an increase in trading of
Hard Red Winter wheat on the spot floor this crop season.

Exports: Of the Wheat, there were 601,440 metric tons of Wheat confirmed.
Breakdown of the wheat is as follows: 446,140 metric tons of Hard Red Winter,
29,800 metric tons of Northern/Dark Northern Spring, 120,000 metric tons of
Soft White and 5,500 metric tons of Western White Wheat confirmed. Of the feed
grains, there were 252,000 metric tons of Corn and 68,206 metric tons of Sorghum
confirmed. There were no oilseed or feed ingredient exports confirmed. **These
may not be the only export sales that have transpired this past week; however,
they are the only sales that could be confirmed by USDA Grain Market News.**

Spring Wheat: Prices are for US 1 Dark Northern Spring Wheat with less
than 2.0 pct Vomitoxin. The 14 pct protein Spring Wheat was 1 3/4 to 6 3/4 cents
higher from 5.43 1/2-5.48 1/2, the basis was 5 to 10 cents higher from 40-45
cents over the Dec futures. Hard Red Winter Wheat 12 pct protein had no quote
on the spot market; the 20 day to-arrive bid was 6 3/4 cents higher at 5.31 1/2,
the basis was 10 cents higher at 28 cents over the Dec futures.

[AdamSmith]

Agstar77, this may not constitute proof to you, but this is information that is readily available to any farmer who cares to spend 2 minutes on the internet.

Just go to www.mgex.com/cash_markets.html

Stacked up against what real data the cwb puts out (which is nothing)about current sales numbers and prices. I'll go with this until I see something concrete from the cwb.

Agstar77, Basis is the costs to move grain from the interior to the end user or export position. And the numers I've shown above show the true cost of the cwb monopoly system to farmers.

These numbers are pretty overwhelming and I'm sure by the time this political exercise is over, every farmer in western Canada will be shown these numbers and what they truly mean.

[charliep]

Just a note the historical prices have been updated on the CWB web site. I direct everyones attention to the CWRW DPC versus FPC/PRO chart. The CWB own pricing would support the comments craig, AdamSmith, et al have been describing.

[agstar77]

AS, all this is based on the assumption that you could sell all your grain into this market . If you could sell it what effect would it have on that market? We could sit here and debate the so-called greener grass on the other side of the fence but in the end it is all a academic debate. As far as I can see American farmers are going out of business just as quickly as we are even with their superior system. You may be right that some of us will be better off with the system you propose and I don't dispute your numbers , but I don't believe most farmers will be better off with system you propose JMHO. Oh and by the way I have not said I don't trust the Multi-nationals, I just don't believe we can put all our faith in the goodwill of their boardroom, since the will always look after their shareholders first, and I don't have a problem with that.

[AdamSmith]

Agstar77, you said "AS, all this is based on the assumption that you could sell all your grain into this market . If you could sell it what effect would it have on that market?"

What do you mean by "this market"?

This market is the world wheat market. The world wheat market is affected by 1000 different things that are dynamic and changing every day. Having 1000 new Adam Smith selling individually into this market will have next to zero impact on this world wheat market. Agstar77 it's all the same grain and the same amounts.

Yes there would be a new dynamic in Canada but that will not effect the overall supply/demand picture. The new open market dynamic will effect the way Canadian Wheat comes into the market and the open market will always accept the grain.

As far as what the basis levels might be with wheat from our grain companies, I guess I think a decent indicator of an open market wheat basis would be by looking at a combination of the current open market crops basis levels and those American Northern tier wheat basis levels which the open market wheat will arbitrage with.

I guess I don't understand why you believe that it will only be "some" farmers who will benifit, but "most" won't?

The open market will provide opportunity for all. Many new opportunities in fact.

And I believe a voluntary CWBII has a fit within the open market for those who may feel like you. We just need to see a "Can Do" attitude from that organization.