ICE's grain futures waiting on cash market

**mcfarms** · Jun 7, 2012, 23:02

You better adjust your topic based on the activity on New Ag talk Charlie, looks like no trades or liquidity for your topic either (Kinda like the ICE wheat and barley contracts)

**charliep** · Jun 8, 2012, 06:24

The development of the cash market in the new wheat
market is something I am following very carefully
including which futures grain companies are using as
the reference/hedge tool and basis. From there, we
all are going to have to understand the protein and
grade market. People tell me this will happen quickly
with the first deliveries after harvest this fall.

Most farmers don't care. Ignorance is bliss.

**mcfarms** · Jun 8, 2012, 08:35

They care but when the line companies and the ouside players/funds are using the US exchanges I have to agree with Ed White in the producer this week.
The barley contract is going to struggle mightily as well as the feed volume couldn't keep the old contract alive and I don't think you'll see the malt industry use the contract.

**charliep** · Jun 8, 2012, 08:44

There is a re-newed interest in the cattle industry given continued tight feed grain supplies (story to be told on wheat) and recent events around Newco. Also, the new world will mean export feed barley business will come together a lot more quickly (a panamax or 2 of feed barley sales off Vancouver) can come together quickly in the new world. More volatility and risk. Hopefully we can get a fully traded barley contract for all members of the supply chain.

**Burbert** · Jun 10, 2012, 10:14

Yeah things are gonna get better and
better cousin the gobermont boys is
preachin agin, free open market,
marketeering, making money when the prices
are goin down. No end ta suckcess in
Comedian framing, now that the wheatie
bored has been stolen from Comedian
framers............

**charliep** · Jun 10, 2012, 16:44

You have always sold in the world and North M
American wheat markets. CWB used futures markets
and other tools in making these sales - they occurred
in the context of the CWB pooling system with limited
to no visibility to farmers or market signals. You still
have that alternative if you choose to use it.

In the new world, western Canadian will actually be
able to make sales based on actual world or North
American prices. These prices will be based on some
futures so that all members of the supply chain
(farmer to end user) will use these prices as a
reference or a hedging tool. Hopefully western
Canada can have a made in the prairies futures price
to base decisions and if they choose, an alternative to
manage risk. A dreamer I realize but think about the
benefit of a well functioning options market based off
the ICE futures Canada wheat, durum and barley
futures contracts.

Nothing has really changed in the new world. Just
more decisions made by you versus a single desk and
more information to use in these decisions.

ICE's grain futures waiting on cash market