Wittal: Be sure of grades when using GrainFlo

Aug. 19 –– Financial markets continued with a slow climb upward again today. Overnight world markets were mixed, so U.S. financial markets struggled to start but were able to end the day with positive results.

Grains struggled along again today with no real direction or news to prompt any real trading action.

Trading in canola was very limited as traders stepped to the sidelines ahead of the Statistics Canada report due out this Friday.

The U.S. dollar is down almost half a cent today; the Canadian dollar is up 0.45 cents to close at US91.22 cents.

The Dow Jones September quote closed up 55 points at 9,265.

Crude oil is up $3.23 per barrel today to close at US$72.42.

Corn finished up four to six cents per bushel today.

Beans ended mixed, up 1.4 cents to down four cents per bushel today.

Wheat was even to down five cents per bushel on the various U.S. exchanges. Minneapolis September wheat futures closed down two cents per bushel today.

Canola finished up 90 cents to $3 per tonne today. Barley closed up $1.80 today at $134.50 per tonne.

GrainFlo, year two

Today we’re going to have a look at the Canadian Wheat Board’s GrainFlo program and what it can do for you. This is the second year for this grain delivery program for Canada Western Red Spring (CWRS) and Canada Western Amber Durum (CWAD) wheats.

What the CWB has done is establish four delivery periods for which producers can sign up to deliver their grain: Nov. 1-Dec. 31, Jan. 1-Feb. 28, March 1-April 30 and May 1-June 30.

Under this program, the CWB assures you will be able to deliver your grain during the delivery period you have signed up for, by allocating cars to the stations that have signed up those tonnes, to allow for timely deliveries by producers within their delivery period.

Signup for this program is Oct. 1 to Oct. 31, 2009, and is on a first-come first-serve basis until the predetermined tonnages have been committed. For CWRS the total accepted tonnage per delivery period will be 700,000 tonnes, and 200,000 tonnes for durum.

This program allows you to sign all of your tonnes to be delivered in one period if you so choose. This can be a real advantage in a year when stocks are in excess and the CWB may not be able to accept all deliveries through the current contracting system.

The key to this program is that you need to be very sure what the grade of your grain is when you sign it up, as this is key to the program working properly. The CWB needs to know the quality that the grain companies are going to be bringing in so that the CWB can allocate cars for shipping to those stations for that grain. If the grain is not the right grade, it will not move and will plug up the system. If your grade does not match what you signed up, you may be facing liquidated damages to get out of the contract, if you can’t transfer it to another producer to deliver the proper grade against the contract. 

There is also a storage payment component to this program for grains signed up in periods 2, 3 and 4, to encourage producers to spread out their deliveries wherever possible to meet sales needs throughout the year.

With this program you can deliver your grain sooner and get your monies faster but you need to be very sure of your grades before signing up your tonnes. 

It is very important that you and your grain buyer agree on the grade before signing up tonnes so that there are no surprises or costs later. 

That’s all for today. — Brian

— Brian Wittal has spent over 27 years in the grain industry, including as an elevator manager and producer services representative for Alberta Wheat Pool, a regional sales manager for AgPro Grain and farm business representative for the Canadian Wheat Board, where he helped design some of the new pricing programs. He also operates his own company providing marketing and risk management advice for Prairie grain producers. Brian’s daily commentaries focus on how domestic and world market conditions affect you directly as grain producers.

Brian welcomes feedback and information on market conditions in your area, such as current offering prices, basis levels, trucking premiums and special crops contracts. Contact Brian today.

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Brian Wittal

Brian Wittal has 30 years of grain industry experience and currently offers market planning and marketing advice to farmers through his company Pro Com Marketing Ltd.

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