New Normal

[agstar77]

HRS bid .50 /bus higher Southern Mb than Southern Sask. Very interesting.

[boarderbloke]

Agstar, what locations are you comparing?

[agstar77]

Winnipeg to Swift .

[charliep]

Is the new normal good or bad? The spreads reflect Manitba's distance from the Minneapolis milling wheat market and farmers ability to arbitrage US elevators if prices fall too far out of line. The CWB always adjusted prices somewhat through the Freight Adjustment Factor but the main spreads were based east west with winners/loosers in the pooling system because of this.

[charliep]

Will note that Manitoba feed grain prices were above Alberta for most of the 2011/12 crop year. Why? Because of the crop production disaster in the eastern prairies and the relatively tighter feed grain supplies. Not a bad thing. Just realities of the year. Markets do work when they are given the opportunity.

[boarderbloke]

charliep, our location in SESK was always close to the CWB midway line and we've seen some of the highest freight deductions, even though we're 30 miles from the USA. The FAF didn't come close to off setting the freight we were being charged, when grain was shipped south from Estevan or Weyburn. Since were not being charged freight to Thunder Bay, Vancouver or Churchill our basis has been 1/2 to 2/3rds what it was under the CWB, occasionlly better. I believe 1 yr the CWB had a USA gathering pool along the 49th parallel, from southern Mb to midway Sk south of the #1 highway, but the lower freight rates for that area didn't go over very well with the more northerly CWB supporters.

[agstar77]

And the 30c spread in Canola?

[charliep]

Price spreads in canola are very much demand based relative to closeness to crushing plants. Manitoba canola prices are not driven by west coast activity but by the plants in your own back yard and those to the south and east of you. Derek Brewin/Jannelle Mann at the University of Manitoba have done some really good work on this topic.

[charliep]

Direction challenged although realize canola crushing in Hamilton and Quebec. Meant to say west. Manitoba is in a good situation to fill all these crushing plant needs. Nice to have domestic processing capacity as your neighbor versus 100 % export demand. A dreamer would note increased interest for exporting durum off the west coast and heavan forbid, domestic milling capacity to turn durum into semalina and pasta. Way off your topic.

[agstar77]

There are durum mills springing up all over Sask and durum price is skyrocketing.