Wittal: Take care of your year-end paperwork

June 29 — All markets were rather quiet today with no real news to influence them in either direction. Financial markets were mixed to up a bit and grains were mixed to down, as traders stayed on the sidelines awaiting Tuesday’s U.S. Department of Agriculture acreage and stocks report.

The Canadian dollar dropped 0.32 cents, closing at US86.51 cents.

The Dow Jones June quote closed up 91 points at 8,529.

Crude oil closed up $2.33 at US$71.49 per barrel.

Corn closed down three to seven cents per bushel today.

Beans are up 14 cents on the nearby month and down three to 10 cents per bushel on the forward months.

Wheat closed down three to 16 cents a bushel on the various U.S. exchanges.

Minneapolis July wheat futures closed down 15.4 cents per bushel today.

Canola closed down $4 to $5.20 per tonne today. Barley finished up $1.80 per tonne to close at $170.50.

Wrapping up 2008-09

Over the next few weeks I am going to do a review of current Canadian Wheat Board contracts, both pricing and delivery, to try to give readers a better understanding of how these contracts work, what your obligations are if you sign up for one of these contracts and what advantages, opportunities and risks you may face when using the different contracts.

Today I want to talk about wrapping up the 2008-09 crop year and some of the things you need to make sure you’re looking after.

With the current growing concerns out there, producers may be thinking about holding back old-crop grain for seed for next year; if so, they need to make sure they have the proper tonnes signed up on their 2008-09 CWB delivery contracts for a couple of reasons:

  1. You want to make sure you can deliver as much of your grain as possible, and
  2. You don’t want to be short on the contract or you will be faced with a “liquidated damages” (LD) charge that, based on history, usually starts at the $6 per tonne level.

The last half of this year the CWB has been aggressively looking for wheat to ship, so this would tell me that if you’re short on your delivery contract you will be assessed LD charges and will have to pay them, as that wheat was needed to meet sales commitments.

The rule today is that if you deliver 90 per cent or more of your total contracted tonnes, you will not be charged LD charges.

If you have concerns about your contracted tonnes you will need to call your local CWB farm business rep to discuss the situation to see what they may be able to do to help you out.

If you don’t have a contact number for them, you can find it on the CWB web site or call your local grain elevator and they can give you a name and number.

You can also call the CWB help line (1-800-275-4292) and talk to a business rep, but if you need to reduce or increase your contracted tonnes you will have to talk to your local FBR as they are the only ones who can authorize those changes.

Take some time to check it out and make sure you have the proper contracts in place; talk to your elevator to make sure they are aware of what you have left for grain to deliver, so you are not forgotten as the year-end rush approaches.

This is your business — make sure it’s looked after so that it doesn’t cost you in lost revenues from not being able to deliver grain, or from LD charges for not having enough grain to meet your contract obligations.

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.

About the author

,

Columnist

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.

Comments

explore

Stories from our other publications