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Thread: Merchants in denial

  1. #1
    walter melon
    Guest

    Merchants in denial

    Is it just me or does everybody think the grain merchants are still in denial about the state of the wheat crops worldwide? I've been bid 200/t for feed for collection this week and still wont sell because its in the field uncut but the general feeling I am getting is that they all think there is quality wheat out there and they all think there is normal yields.
    I am not alone by a considerable margin with milling wheat testing at 16 protein, 70 hag, 65 bushel. Just to top that off the yields are looking to be 30% down on our 10 year average.
    I've cut a bit of my own as a 'just see' exercise but also cut a 100 acres of cordial for a neighbour and the results above are correct for that. My neighbours and friends are all reporting the same.
    I fear the market is not going to fully understand until spring 2013?

    In May 2011 Prince Charles gave a keynote speech in the USA clearly stating theres a worldwide food shortage on the horizon. Possibly arrived a bit early but I think 2013 is it.

  2. #2
    Derky
    Guest

    Re: Merchants in denial

    Cant agree more we nornally average 4 tonne, this year 2.5 no quality low bushel and ergot there will be very little about.

  3. #3
    Panzer III
    Guest

    Re: Merchants in denial

    I agree entirely.

    During a conversation with a regional head rep for a national company I mentioned the state of crops on my farm and on others local and not so local. I asked him when we would hit 'import parity' (Kerrrrching!) and he just laughed!.

    "We will NOT export all of this years surplus before the 2013 harvest. Its just not going to happen!".

    Either he knows something I don't (he usually tempts me to sell days before a bull run ) or he is completely oblivious to the problem, which is highly unlikely.

    - If I were in his impeccably kept brogues, I would be buying up as much cheap MAY 2013 wheat as quietly as I possibly could. If ever there was a low risk year to hoard *contracted* tonnage without getting their fingers burned to the bone, then this is it. No wonder the trade is playing possum.

  4. #4
    walter melon
    Guest

    Re: Merchants in denial

    Quote Originally Posted by Derky View Post
    Cant agree more we nornally average 4 tonne, this year 2.5 no quality low bushel and ergot there will be very little about.
    Whats annoying me is the merchants attitude's and its not just one, but all of them seem to truly believe that they will just buy quality elsewhere and mix it in.
    Obviously we've all been conned for the last 10 years and there is in fact intervention stores full of group 1 and 2 milling wheat?
    If they think there going to make feed wheat claims on my milling wheat they've got another thing coming. I'll sit tight until the market realise's there in the s**t and at that point feed wheat will be over 250/t because there isn't any quantity of nice wheat out there.

  5. #5
    clover
    Guest

    Re: Merchants in denial

    Quote Originally Posted by walter melon View Post
    Is it just me or does everybody think the grain merchants are still in denial about the state of the wheat crops worldwide? I've been bid 200/t for feed for collection this week and still wont sell because its in the field uncut but the general feeling I am getting is that they all think there is quality wheat out there and they all think there is normal yields.
    I am not alone by a considerable margin with milling wheat testing at 16 protein, 70 hag, 65 bushel. Just to top that off the yields are looking to be 30% down on our 10 year average.
    I've cut a bit of my own as a 'just see' exercise but also cut a 100 acres of cordial for a neighbour and the results above are correct for that. My neighbours and friends are all reporting the same.
    I fear the market is not going to fully understand until spring 2013?

    In May 2011 Prince Charles gave a keynote speech in the USA clearly stating their a worldwide food shortage on the horizon. Possibly arrived a bit early but I think 2013 is it.
    "The food chain" buys grain as cheap as It can.Merchants merely act as a facilitator between primary producer and processor.For this,they recieve a margin.I think this is a year to hold onto wheat til the market exhausts the supply of wheat from the "get it shifted quick regardless of price" sellers.Get it cut and dried and see what its worth.Maybe dressing to up the bushel weight will be worthwhile.
    I only sell stuff I have.Others take a different view.Sell stuff they assume they'll have.Sell stuff they expect to have.Sell stuff they hope they'll have.Fair enough.There are all sorts of fancy mechanisms available to reduce risks.They dont always work to the producers advantage.

  6. #6
    walter melon
    Guest

    Re: Merchants in denial

    Quote Originally Posted by Panzer III View Post
    Either he knows something I don't (he usually tempts me to sell days before a bull run ) or he is completely oblivious to the problem, which is highly unlikely.
    Thats about right so all the heads of the big grain buyers met up for a jolly last week and decided between them that they need to play the market down and try and con 70,000 farmers into selling at basically a loss, so then they can then sit on the rubbish wheat waiting for the end users to drop their required spec, and whilst that happens the market price has conveniently shot up another 25%.

    I have one genuinely nice lady buyer thats been ringing me weekly for the last month asking to buy some wheat. When I question the sate of the worldwide market she's blatantly does not have a clue and has merely been told by her superiors to buy wheat off farmers at normal specs and then make claims on the delivered product.

  7. #7
    RBM
    Guest

    Re: Merchants in denial

    I don't know where they think this quality wheat is going to come from but it certainly won't be in our neck of the woods.

    Gallant sample 69-70 bushel weight 13.4 prtoein and 270 hagberg on contract and been told it is feed. I think we will sit on it untiul they actually wakle up and realise that searching for 76 spec is impossible!!

    They are all being fairly unsympathetic and it is like they are sticking their heads in the sand with regard to the quality aspect!

  8. #8
    Panzer III
    Guest

    Re: Merchants in denial

    I wonder if a brighter man than I could look at and total all of the current OPEN London futures contracts for the 2012 harvests wheat? (call that tonnage 'X').

    At some point we will work out that Britain has produced 'Y' tonnes in harvest 2012.

    If Y minus X is 'available tonnage' (call it 'Z', just to confuse the hell out of everyone ) then what will happen by the time we get to JULY 2013, and there isn't enough left in the pot? i.e. - X is greater than Y, because Z plus a bit too much has been milled/fed/exported etc - ie open contracts are more than remaining available tonnage?

    What would happen to anyone holding a futures contract that DOES NOT HAVE ACCESS TO PHYSICAL TONNAGE to fulfil that obligation???

    I dont think imports come into the equation to satisfy that demand this year - this is a global issue.

    So, what happens to price on the day the JULY 2013 futures go off the board?!

    In the spirit of a certain one time BFF'r - to quote the Kaiser Chiefs - "I Predict A Riot".

  9. #9
    Mr Muck
    Guest

    Re: Merchants in denial

    Can the pig and poultry industries afford 200 wheat let alone 250? How long does it take them to stop production requiring feed wheat once they cant afford the losses anymore? As a mixed beef sheep and arable place we will try and do with as little bought in feed as we can at current prices but its the pig and poultry units that would have the biggest impact as they have no alterative. Not wishing to burst the balloon by any means but it can only continue if chicken and pork prices follow.

    I know this makes no odds to milling wheat though.

  10. #10
    Main Man
    Guest

    Re: Merchants in denial

    Rang one merchant to see if I could shift a load of spring feed barley, he told me do nothing till November, price advantage even now is huge (I.E. 190/t as opposed to spot of 167).

    So hanging on in the hope that (a) I have more to sell given the terrible weather forescast and (b) that prices do in fact reflect the shortage you guys are talking about.

    Will not selling anything till November now but cashflow projections will be buggered.

    Sitting tight and storage seems to be the way forward!

  11. #11
    Grain_Buyer
    Guest

    Re: Merchants in denial

    Quote Originally Posted by walter melon View Post
    Is it just me or does everybody think the grain merchants are still in denial about the state of the wheat crops worldwide? I've been bid 200/t for feed for collection this week and still wont sell because its in the field uncut but the general feeling I am getting is that they all think there is quality wheat out there and they all think there is normal yields.
    I am not alone by a considerable margin with milling wheat testing at 16 protein, 70 hag, 65 bushel. Just to top that off the yields are looking to be 30% down on our 10 year average.
    I've cut a bit of my own as a 'just see' exercise but also cut a 100 acres of cordial for a neighbour and the results above are correct for that. My neighbours and friends are all reporting the same.
    I fear the market is not going to fully understand until spring 2013?

    In May 2011 Prince Charles gave a keynote speech in the USA clearly stating theres a worldwide food shortage on the horizon. Possibly arrived a bit early but I think 2013 is it.
    The fact feed wheat is over 200 and prems are +30, might suggest everyone is aware there is a shortage???? By paying 300 would I buy any more, or better quality?

  12. #12
    Grain_Buyer
    Guest

    Re: Merchants in denial

    Quote Originally Posted by Panzer III View Post
    I agree entirely.

    During a conversation with a regional head rep for a national company I mentioned the state of crops on my farm and on others local and not so local. I asked him when we would hit 'import parity' (Kerrrrching!) and he just laughed!.

    "We will NOT export all of this years surplus before the 2013 harvest. Its just not going to happen!".

    Either he knows something I don't (he usually tempts me to sell days before a bull run ) or he is completely oblivious to the problem, which is highly unlikely.

    - If I were in his impeccably kept brogues, I would be buying up as much cheap MAY 2013 wheat as quietly as I possibly could. If ever there was a low risk year to hoard *contracted* tonnage without getting their fingers burned to the bone, then this is it. No wonder the trade is playing possum.
    All of this crap quality will be feed, a lot of milling and biscuit wheat will end up in a chicken, hence plenty of feed wheat, even if yeilds are poor. We will import milling wheat, and try and use as much UK as we can as we do every year. If you think May wheat on LIFFE is cheap buy it yourself.

  13. #13
    Grain_Buyer
    Guest

    Re: Merchants in denial

    Quote Originally Posted by walter melon View Post
    Thats about right so all the heads of the big grain buyers met up for a jolly last week and decided between them that they need to play the market down and try and con 70,000 farmers into selling at basically a loss, so then they can then sit on the rubbish wheat waiting for the end users to drop their required spec, and whilst that happens the market price has conveniently shot up another 25%.

    I have one genuinely nice lady buyer thats been ringing me weekly for the last month asking to buy some wheat. When I question the sate of the worldwide market she's blatantly does not have a clue and has merely been told by her superiors to buy wheat off farmers at normal specs and then make claims on the delivered product.
    yes, that's what we all did.(FFS)

  14. #14
    walter melon
    Guest

    Re: Merchants in denial

    Quote Originally Posted by Grain_Buyer View Post
    We will import milling wheat, and try and use as much UK as we can as we do every year.
    This is my point exactly. THERE IS NO QUALITY WHEAT!!

    USA, Canada, Australia, Russia, Eastern Europe all poor harvests.

    Do you get it yet?

  15. #15
    Grain_Buyer
    Guest

    Re: Merchants in denial

    so if there is NO quality wheat.....what would I gain by paying you 300/mt?

  16. #16
    Alchemist
    Guest

    Re: Merchants in denial

    Quote Originally Posted by walter melon View Post
    This is my point exactly. THERE IS NO QUALITY WHEAT!!

    USA, Canada, Australia, Russia, Eastern Europe all poor harvests.

    Do you get it yet?
    Australia?

  17. #17
    Panzer III
    Guest

    Re: Merchants in denial

    Quote Originally Posted by Grain_Buyer View Post
    The fact feed wheat is over 200 and prems are +30, might suggest everyone is aware there is a shortage???? By paying 300 would I buy any more, or better quality?

    By paying 200, plus 30 premium, then knocking off 50 for claims, what do you hope to achieve?

    I've already passed on a message via the merchants to (AHEM!) ADM that this is the last year that I'll be harvesting milling wheat, because they thought that 1.50 claim per point for last years crop was a good idea

    If you think May wheat on LIFFE is cheap buy it yourself
    And if you think investing a lot extra to produce a product to your specifications and then being deducted the best part of the premium is fun, then try growing it yourself, because I cant be ****** doing it for you any more :kiss:

    And for what its worth, I've had to play by your f'ing extortionate contract rules and accept crap premiums for good quality for the last 20 years, this year the boots on the other foot. If you want milling wheat - pay for it and learn to bake to CWS loaf standards (ie tosh), or go begging around the world for a something that doesn't exist.

    Or will the flour mills shut down from December through to August?

  18. #18
    Grain_Buyer
    Guest

    Re: Merchants in denial

    you're not going to get a 50 claim. If it's millable you'll get a good premium, otherwise it's feed, and the only reason it's feed is because we can't do anything else with it. I don't know why your getting all upset, as this is the kind of year when your otherwise poor quality wheat can be used for something, and hopefully give you a worth while premium. Merchants will pay whatever it take to buy the wheat, as long as they can sell it. If you don't like todays price, hang on, the market will keep rising until folk start selling, simple demand v's supply.Millers have already reduced thir kg/hl specs and feed compounders will take to 65kg's, and we can export grades lower then this, so I can't see why the merchant trade are the "bad boys"??

  19. #19
    druid
    Guest

    Re: Merchants in denial

    If there's a milling wheat shortfall across the world they'll have to produce lower quality loaves for the public or the alternative not enough bread. In the eighties i ground a little really rough hobbit feed wheat and shuvved it in the oven. A loaf came out and I was satisfied. Not ideal but if theres not enough milling to go round then feed wheat can go in to a loaf and they won't starve.

  20. #20
    Roger Perry
    Guest

    Re: Merchants in denial

    Not true that U.S. wheat harvest was bad, not sure where you guys get such information.

  21. #21
    Jim Bullock
    Guest

    Re: Merchants in denial

    I will probably be shot down in flames...but talking to a very large chicken producer..he said that his feed costs were not his main concern and if wheat did hit 250/ton it would not be the end of the world...Equally if we look at the value of the wheat going into an average loaf of bread 150/ton...300/ton it would only add a couple of pence to the cost of a loaf...as primary grain producers our input into the final cost of a product hardly scores on the cost structure... I understand that the cost of producing coloured wrapping for a Hovis loaf is more than the cost of the wheat that goes into the loaf..

  22. #22
    pig fighter
    Guest

    Re: Merchants in denial

    Quote Originally Posted by Jim Bullock View Post
    I will probably be shot down in flames...but talking to a very large chicken producer..he said that his feed costs were not his main concern and if wheat did hit 250/ton it would not be the end of the world.....
    So what concerned this chap if feed grain at 250 was not something he was bothered about?

  23. #23
    happycows
    Guest

    Re: Merchants in denial

    Quote Originally Posted by pig fighter View Post
    So what concerned this chap if feed grain at 250 was not something he was bothered about?
    who was going to bankrupt him first!

  24. #24
    ex_pool_manager_ha
    Guest

    Re: Merchants in denial

    Nonsense, merchants are are in the c*** too, less to buy from the likes of us, and plenty of wheat bought at s under today's market that is way below spec. They could, contractually, get really arsey with folk who have sold forward and fail to come up with the goods. If its not bad enough, they have sold futures to hedge these farm purchases and are now losing a fortune on the futures market, whilst trying to move cheap, low quality grain that won't get rejected at intake, and lose them the goodwill of farmers at the same time who happily sold forward. Just to balance the argument.

  25. #25
    Jim Bullock
    Guest

    Re: Merchants in denial

    Quote Originally Posted by pig fighter View Post
    So what concerned this chap if feed grain at 250 was not something he was bothered about?
    Obviously all inputs including feed are important when the margin per bird is a few pence but labour, electricity and above all the investment he has made into his buildings are very high on his agenda...
    I am not sure we will see feed grains get anywhere near 250/ton..we were offered 200 last week but that was because there were 6 milllion hungry chickens to feed ...today it has fallen back to 185 as there have been a few tons harvested around the area...

  26. #26
    Badshot
    Guest

    Re: Merchants in denial

    Quote Originally Posted by Roger Perry View Post
    Not true that U.S. wheat harvest was bad, not sure where you guys get such information.
    It has been widely reported that USA has been suffering a severe drought through the corn belt, with many crops going to be poor yielding at best so less exports available. Haven't seen anything about poor quality though.

  27. #27
    slejpner
    Guest

    Re: Merchants in denial

    Quote Originally Posted by Badshot View Post
    It has been widely reported that USA has been suffering a severe drought through the corn belt, with many crops going to be poor yielding at best so less exports available. Haven't seen anything about poor quality though.
    American wheat beat the drought to harvest - like us they had a very mild winter and spring... a late frost during ear emergence was a risk for many and caught out a handful of unlucky growers.
    I think wheat was above average yield overall in US, and Canadian spring going ok so far too.
    Only problem is, in US these days, wheat is very poor relation to soya and corn. So acres planted falling.

    Now US 2013 wheat prospects are another matter altogether.
    The winter wheat belt wants to start seeding any week now, througt to early Oct, geography dependent.
    There is a drought on.

  28. #28
    honest john
    Guest

    Re: Merchants in denial

    Quote Originally Posted by Panzer III View Post
    By paying 200, plus 30 premium, then knocking off 50 for claims, what do you hope to achieve?

    I've already passed on a message via the merchants to (AHEM!) ADM that this is the last year that I'll be harvesting milling wheat, because they thought that 1.50 claim per point for last years crop was a good idea



    And if you think investing a lot extra to produce a product to your specifications and then being deducted the best part of the premium is fun, then try growing it yourself, because I cant be ****** doing it for you any more :kiss:

    And for what its worth, I've had to play by your f'ing extortionate contract rules and accept crap premiums for good quality for the last 20 years, this year the boots on the other foot. If you want milling wheat - pay for it and learn to bake to CWS loaf standards (ie tosh), or go begging around the world for a something that doesn't exist.

    Or will the flour mills shut down from December through to August?
    +1
    Why do the food trade in general think so short term ??
    It costs a lot of cash to try. So if you dont pay a fair price in a year of so called over surply how are we to fund the growing of a good crop for our and your business the following year.
    Same for all crops, Spuds Apples Eggs Wheat or what ever.
    When we cant afford the inputs you wont get the output.

    On Wheat .
    We have very poor yeild. 40% down.
    Very poor weights. 15% down on 2011.
    Very poor Hags. 100 sec down on 2011.
    Mixed Proteins.
    Slow combineing. 40% down on normal.
    Fact's
    Thats two years we have loaded a lot of N on it for no return.

  29. #29
    Condi
    Guest

    Re: Merchants in denial

    Quote Originally Posted by walter melon View Post
    This is my point exactly. THERE IS NO QUALITY WHEAT!!

    USA, Canada, Australia, Russia, Eastern Europe all poor harvests.

    Do you get it yet?
    If you think you know better nothing to stop you going out and trading, even from a computer with a fairly small pot of cash its easily possible. Put you money where your mouth is.

    Most of the trade will admit its not going to be a fantastic harvest, but there will still be bread on the shelves come next July and I would be amazed if its gone up by even 10p a loaf. In other words, nobody will notice until the papers make a fuss of it.

  30. #30
    kennyo
    Guest

    Re: Merchants in denial

    Quote Originally Posted by Condi View Post
    If you think you know better nothing to stop you going out and trading, even from a computer with a fairly small pot of cash its easily possible. Put you money where your mouth is.

    Most of the trade will admit its not going to be a fantastic harvest, but there will still be bread on the shelves come next July and I would be amazed if its gone up by even 10p a loaf. In other words, nobody will notice until the papers make a fuss of it.
    I would expect the manufacturers to use it as a good chance to put up prices!

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