what does this mean?

[sask]

Canada Wheat Board suspends 07-08 barley
outlook

WINNIPEG, Manitoba (Reuters) - The Canadian
Wheat Board said it suspended its price outlooks
and farmer payment options for barley on
Wednesday for the 2007-08 (Aug-July) crop year
because of the federal government's move to end
its sales monopoly by August 1.

"The uncertainty of the current situation makes it
impossible to estimate a pool return," the CWB said
in a statement.



© Reuters 2007. All Rights Reserved.

[Fransisco]

Looks to me like the CWB has decided to get out of the barley business without actually having to come out and say we are getting out of the barley business.

I'd hate to be a Canadian Maltster right now.

[charliep]

Should also note the fact the CWB took $8/tonne out of the 2006/07 pricing pools. I find the press release amazing/will let speak for itself.

Quote "CWB 2006-07 Malting Barley PRO Drops; 2007-08 Barley PROs and PPOs Suspended
Winnipeg -- The CWB today released an updated designated (malting) barley Pool Return Outlook (PRO) for the 2006-07 crop year. Designated barley values are down $8 per tonne for both two-row and six-row varieties, compared to last month's published values. The drop in the PRO is attributed to the uncertainty created by the federal government's March 28 announcement that it will remove the single desk on barley effective August 1, 2007, as well as other market factors."

[Fransisco]

Also from the release.

<blockquote>"Customers are also reluctant to make purchases as they are anticipating their ability to access supplies from multiple sellers at values lower than a single-desk seller. This means previously projected sales at current high price levels will not materialize for the 2006-07 pool. In addition, higher spot prices in August are expected to erode farmer deliveries previously expected in the 2006-07 pool." </blockquote>

This isn't a market report, it's pure propaganda.

[TOM4CWB]

Fransisco and Charlie,

Clearly the CWB is setting up conditions for damages to be charged against the federal government on the Aug 1/07 barley change date.

We would have to be blind not to see this!

This way the CWB can get someone else to do the lawsuit.

And who can do anything about it?

No ONE.

It is the CWB "single desk" and the CWB can fulfill this prophecy at the snap of their fingers... they are in charge $*/t less... what buyer would complain?

Again who is the CWB working for?

CWB Agents.

[malleefarmer]

sounds a bit similar to this

Evidence cannot be ignored – PGA

Revelations of massive hedging losses have brought new urgency to the Howard Government’s treatment of the AWB monopoly, according to PGA Western Graingrowers Chairman Leon Bradley

“We are concerned that losses totalling nearly A$400 million are already being transferred via the pools to wheat growers, mainly in WA and SA, by AWB”, Mr Bradley said.

“The government cannot repeat the mistake of last year, and take the word of AWB over how well they have managed the national pool”

“All the evidence – from the Cole Inquiry to the latest Wheat Export Authority Growers Report to the reported hedging disaster– reveals mismanagement and misrepresentation within the export wheat marketing system.”

“To give the monopoly rights to AWB for another harvest can only prejudice the interests of all Australian wheat growers.”

“The PGA Western Graingrowers is calling on Cabinet to ignore the National Party backbench, who want to support AWB without qualification and in the full knowledge that that the current system puts WA and SA growers at a commercial disadvantage.”

“We remind Cabinet that there are numerous alternative grain traders, who can deal with farmers on a voluntary basis, who behave honestly and ethically, and who will compete for growers business based on merit.”

[sawfly]

a lot of what the board says makes perfect sense.

as of aug. 1 their not the only seller in town, its a little tougher to forecast price.

if it looks like a good malt crop is comeing, maltsters may hold off purchases ,and they may only have to offer a few cents more than feed.

maybe that will help the feed price.
wasn't that the whole idea.

[charliep]

A very high percentage of the malt barley pool is already sold. If 90 % were sold, the last 10 % would have to have been sold at an $80/tonne premium to the overall pool to date. If 80 % sold, the last 20 % would have to be sold at a $40/tonne premium. The premium for sales in the last quarter is likely in this range.

I suspect sales to the domestic malters are done with the exception of a few sales to cover off the world short fall of malt. The question is how much the CWB has forward sold of next years crop and at what price.

Chinese sales have been going to Europe in recent days in spite of the latters crop problems this year. Chinese on all commodities are price buyers versus quality (with the exception of a few breweries.

Suspect the above is more of an admission the CWB totally missed the market this year and is now withdrawing so they can blame the federal government verus looking at their own sales activities/being accountable. The open market can't do any worst job in 2007/08 than the CWB did in 2006/07.

[SASKFARMER3]

BS BS BS could sign today a contract on 100,000 bushels for $4.00 picked up.

$400,000.00 in my pocket
the CWB way.

$286,000.00 and wait and wait and wait and wait then forget about it and when your last dollar arrives you get $326,000. but theirs no cost to me for this premium market.

[craig]

Sawfly
I cannot believe that anyone could suggest what the CWB is telling us in their release makes common sense. The release suggests the board is still making new un contracted sales of malt barley for the 2006-2007 year.These sales as Charlie points out need to be at extremely high premiums to have any impact on the PRO's. The trade not purchasing any more malt than needed in the current crop year and waiting for hopefully lower new crop prices has absolutely nothing to do with the government announcement. Higher spot prices in August are going to erode expected farmer deliveries into the 2006-2007 pool. I thought the role of the CWB was to maximize returns to producers. I guess that is not allowed for producers to try and do the same. The CWB is also projecting higher malt barley returns for 2007-2008. Under this senario would producers given the opportunity under the old rules still not deliver into the new crop year. It is painfully obvious that the CWB considers all farmers as totally stupid if they expect us to believe their release. The reality is that they screwed up big time in 2006-2007 and now they are looking for an out. Maybe they are lucky the vote took place when it did. Today they look like even less of a viable alternative than they did then.

[kamichel]

These sales as Charlie points out need to be at extremely high premiums to have any impact on the PRO's. The trade not purchasing any more malt than needed in the current crop year and waiting for hopefully lower new crop prices has absolutely nothing to do with the government announcement.

In this case doesn't the sales need to be at extremely low prices in order to affect the 06 07 Pro like it did. Say if the CWB was 90 percent sold then to bring the pro down 8 dollars per ton on the last 10 percent the prices must be on the verge of giving away. The real reason is likely the farmer non deliveries this year cancelling the higher prices missed.

[kamichel]

Saskfarmer you may want to check with the company you contracted with. If the CWB pulls out of that contract if not now but maybe in August like they say they could, how will that affect your contract? That contract you have is still dependent on the CWB being a partner in it. No one will honor that contract if prices fall. Can you get a written guarantee that the contract can be honored if the CWB pulls out? In my opinion your contract may not mean much.

[charliep]

One company if offering a $4/bu (delivered their facility) on the PRO if the CWB stays in place/functions in an open market. If the CWB goes, the contract converts into a $4/bu deferred delivery contract. Haven't seen the actual contract but these are the verbal commitments.

[broker]

the malt contracts that are in place for 07-08 have nothing to do with the CWB if they are gone. The prices are guaranteed, with or without the CWB. The only thing that would change would be the "upside in the PRO" clause that some are offering. At least this is the case with my clients' contracts.

[sawfly]

I am certianly not any expert and you guys could all be right, but who knows. Its a done deal.

How about everyone think about how this new system is gonna work, forget the board.

The details of whatever is comming are far more important than the politics of the board and barley

I am planting only 160 of barley this year. Assume all goes well and i get 65bu/acre malt quality. just like everyone else in the country.

lets assume feed is 2.60 come fall, and i didn't sign a production contract for malt.

if some one comes along and offers to take my barley right away for 2.70 its gone.

if i do sign a contract for 3.75 and i send in my sample, and guess what its just not up to par.

The farmers without contracts seem to have better barley.

whats to stop that,
i know a lot of that , happened before, year to year but without any price disipline , whats to stop it everyday.

part of the switch to an open market has to have an independent body to determine quality, so contracts are honored.