New Crop Barley Basis

[charliep]

Has anyone sold (or for that matter bought if you are a livestock feeder) any new crop feed barley? What basis are you being offered (location please) off the new contract specifications (Saskatoon catchment area similar to canola)?

[Ron]

I was quoted futures -12, plus 22 freight to Lethbridge picked up at the bin Lacombe for Nov/Dec pickup. Worked out to $3.00, 90 bu barley @ 3.00 would sure let me straighten out my rotation.

[charliep]

Just to help me out, that is 12 under for a Saskatoon price with a $22 adjustment to bring to Lacombe. Overall result - $10 under the March (yesterday quoted $146).

Asking because process around calculating fall crop insurance prices for feed barley need to change (currently assumed to $20 under the former Lethbridge futures price). Will be nice to get a year of actual traded values under our belt to see how this contract reacts.

[charliep]

Only Alberta guys need to worry about the above - neither Saskatchewan or Manitoba have the variable price benefit or spring price endorsement.

[charliep]

Ron

Math was never my strong point. You were quoted $12 under picked up bin or $10 over delivered feedlot Lethbridge ($22 trucking allowance). Am I understanding right?

[Ron]

The agent said $12 over the Dec futures less $22 freight deduction (I assumed lethbridge) end result was $10 under the futures. Did this over my cell while driving so didnt write down the prices but it would net me 3.00/bu at the bin.
What will a good basis be with the changes to the delivery point?

[charliep]

The levels I have been hearing at Lethbridge are $10 to $15 over.

Theoretical value value at Lethbridge should be close to $20 over. That is based on the delivery price in the Saskatoon catchment area being about $15 under (delivery is loaded rail car or truck out of an elevator so need to pay an elevation plus costs) and about a $35 trucking rate to Lethbridge from central Saskatchewan. Whether the market trades in this area is something that will have to be sorted out.

What are others thoughts on traded/likely western barley futures basis.

[craig]

Charlie
Got some new crop bids today and they are rather disappointing. Delivered Calgary about $143 a tonne which looks like only about 5 over futures. Elevator bid central Alberta at about $128 a tonne. Feed wheat bids new crop at $110 or around $3.00 bushel. I starting to think that disappointing wheat Pro's are going to do a double wamy. Strong feed market related to milling wheat obviously diverting supplies into feed market. Shine is going off milling wheat which will likely mean more CPS and feed barley acres (2007)also knocking down price.

[craig]

Further follow up. In my conversations today it was revealed by one source that a lot of companies are reluctant to set basis levels with the changed delivery point. Was revealed that one line company was offering $19 over Lethbridge but most bids are more like $15.Obvious that buyers are reluctant to buy in this strong market.

[IAMTHEMOLE]

would bid 5 over futures delivered Calgary area. Price as barley is delivered. Would accept 25% tonnage off combine.Equal delivery next 3 months. So that would be 50 % price off Oct 07 and 50 % priced off Dec 07