Delivering Barley against the Futures

**charliep** · Nov 13, 2003, 12:32

You are right in the changes a year ago. Currently $13/t under Lethbridge plus costs. The contract specification/freight grid is located at: http://wce.ca/education/contractspecs/barley_f.asp

**melvill** · Nov 13, 2003, 12:35

rain, actually delivery against futures is at par if delivered "at the buyer's facility at (or in) Lethbridge". Delivery is at non-par differentials - discounts to futures - outside of Lethbridge.

The best place to find out the details, and there are lots of details, is at http://www.wce.ca/delivery_manual.asp from the WCE web site. The WCE site also has maps that show where the differentials - discounts - apply.

**melvill** · Nov 13, 2003, 12:36

Has anyone had any experience with delivering against Western Barley futures recently?

If so, please let me know how it went.

**rain** · Nov 13, 2003, 12:39

Just clarify to me is the -13.00/a deliverd or FOB bin in that region?

**melvill** · Nov 13, 2003, 13:05

$13.00 under is delivered, on truck, at buyer's facility.

**rain** · Nov 13, 2003, 13:11

I kind of consider -$10.00 dleivered into the Strathmore region kind of average. If the delivery into Lethbridge is -13.00 delivered that mean the basis for barley Calgary region would be -24.00 at the farm. I would consider this to be a crappy basis. A -3 to -5 delivered Lethbridge would be more realistic in my mind. How did they come up with -13.00 delivered. Grain Company recommendation?

**charliep** · Nov 13, 2003, 18:03

I encourage you to read the WCE delivery manual.

http://www.wce.ca/education/contractspecs/WBarleyDelivMan_Dec2002.pdf

**charliep** · Nov 14, 2003, 09:48

Maybe I will go a little further here (hopefully keeping simple).

Western barley futures quote is a delivered Southern Alberta price. The actual delivery process is based on a warrant - the paperwork behind feed barley that is stored in a recognized facility for purposes of the western barley futures contract. There is still freight to be paid to the feedlot/feed mill who took delivery. Also the long may not even be in the region of the actual feed barley delivery.

I will leave the question as to whether the grid accurately reflects trucking cost to others. A note is that lots of trucks have disappeared off the road over the past couple of years and shipping costs have gone up accordingly.

Delivering Barley against the Futures