Protein standards for Select CWRW lowered

[melvill]

CWB release yesterday:

"The minimum protein level for Canada Western Red Winter (CWRW) Select wheat in the 2007-08 Identity Preserved Contract Program (IPCP) has been reduced to 11 per cent from 11.5 per cent. Recent analysis indicates that end-use quality can be preserved at this level."

I don't know if the Board's Fixed Price or Basis Contract prices still apply to 11.5% or if they now apply to 11%. I'll try to find out.

[craig]

Melvill
The request for the lowering of the protein level came from a resolution from the Winter wheat producers annual meeting. Interestingly enough the board never notifies the AWWPC when they make the changes. Last year they were paying a $15.00 Premium instead of the $10. as stated in the program. The U.S. uses 11% as there bottom end so it makes sense that we are also there. Wish they were clearer when they make changes with some explanations behind it.

[disker]

Hi Lee and Craig,
Just talked to the board about the CWRW program and now I think I am more confused. The lady claims that they changed the acceptance for the select program from 11.5 to 11 but not the reference grade. Therefore if I was to haul 11% CWRW on the select program I would get the $10/tonne select premium and storage but take a $12/tonne hit because the reference grade is 11.5% and there is no different discount for select or regular CWRW. The reason for this was they wanted more CWRW select tonnage but didn't see the need to change the reference grade to correspond. May have to look more at off board pricing, at today's CWB price $207 - $51 freight/elev -$12 protein discount $10 premium = $4.19/bus or $4.50/bus if you get protein.
What do you guys think
Curt

[melvill]

Yup, disker, you're right. CWRW @ 11% is now eligible for the select grade. Any CWRW that meets the variety and 11% protein requirments is also eligible for any of the premiums of the program including the $10/t and small storage payment as well as guaranteed delivery.

There's more info at: http://www.cwb.ca/public/en/farmers/grain/identity/2008/

You're also right that the reference grade for the Fixed Price and Basis contract was not changed from the original 11.5%. That means that if you deliver 11% wheat you're subject to the discount spread in the initial prices at the time of delivery.

One thing you might want watch is how the quality of the U.S. hard red winter and spring wheats ends up. If the overall quality is lower than last year, the Board is more likely to decrease the spread between 11.5% and 11% and lower.

Of course, you're right about paying attention to the local feed market, too. Can you find a feed user that will offer you a CWB-equivalent price or better locally?

[TOM4CWB]

Discer,

The Difference between HRW Ordinary (10%) px and 12.5px is about $5/t.

Very simular at both PNW and Gulf Port positions... for almost a year now.

It is very frustrating to see the CWB pool distort Canadian winter wheat production through artifical price discrimination... and stop most of the environmental and productivity gains that would come with a transparent pricing system.

How long will we wait for winter wheat to be set free!

I say we should have a vote of just winter wheat growers on this one!

How about it Craig?