Yello Pea targets

[Hopperbin]

What is working on Yellow peas these days??? The price is down we all know. what is working for target pricing, which I am thinking is much higher than just dumping in the pit stupid thing.

[bucket]

Target pricing gives the graincos the supply info they need not to bid peas up.

It worked in the past but now its working against farmers. Its like telling statscan your production.

[bgmb]

You are giving the grain company a free call option.

[mbratrud]

I dont mind using pricing targets just make them very short term. Give the buyer 24 or 48 hrs at the most.

[SASKFARMER3]

Yea those target price contracts don't work for farmer just the grain company. Where oh where crystal ball will farmers sell and how much. Ah I have a group at 5 and 5.50 and 6 Oh well lets bid 5.25, OK grain merchants phone and let farmers at 5 know they can haul and phone ones at 5.50 and say sorry you missed it by .25 cents better luck next time.
That's it in simplest terms.

[mbratrud]

Realistic Target right now unfortunatly $5 at the most. New Indian pea tender came out a couple days ago so more information out in the next week or so.

[mbratrud]

Just to be clear I am speaking to east side of sask freight, guys on west side would probably fetch another .25 cents or so maybe???

[furrowtickler]

Peas prices tanked for one reason - viterra. They dumped a huge amount of yellows at once and flooded the market in Jan. $5 may be as good as it gets for now.

[btjadenlepp]

I totally agree with the points about target prices, but what we struggle with is sometimes you have to be on the list to get a sale made. They make it easier for the trader to make less riksy back-to-back sales, i.e. by selling it to the end user, sweeping up the tonnage they need and locking in their margin all at once. As a grower if you don't have a target registered when that happens you end up hearing about the opportunity after it's full.

www.farmlinksolutions.ca

[dave4441]

Believe me, the last thing the trader uses a target master type contract for is for "easier,less risky back to back sales". Someones feeding you a line.

Target master contracts lock up the tonnage and allows a trader the free call option mentioned above and shows the anxiousness of the growers, or vice versa. They are good in a market that is liquid and driven by public speculation (ie canola) but for crops without futures markets they are a better tool for the trader then the grower. If they puts on a sale at a price that reflects an average of a # of target contracts, it allows him to try and buy it cheaper from the cash market, but before the market rises (or the contracts expire), they are able to "hit" the contracts and protect themselves.