Your Reading List

CWB looks to cash market to attract more wheat

Sign-up deadlines for CWB’s pool programs have come and gone, but the company is still looking for more grain.

“We’ve been able to get some really good sales for the tonnes that we have now, and movement has been really good,” said Gord Flaten, CWB’s vice-president of grain procurement. “So looking to the rest of the year, we’d be interested in doing some additional business.”

CWB is hoping to source more wheat through cash contracts, which have changed since the demise of the single desk.

“In the past the cash options used to be linked to the pools, we had pricing options that would allow farmers to take out cash contracts,” Flaten said. “Now the cash contracts are completely separate from the pools.”

Flaten wouldn’t say how much wheat has been committed so far, but said the company is satisfied with the number even though it’s less than originally anticipated.

“I think the whole industry has seen farmers commit less than they expected at this point in the year, and that’s what we saw too,” he said.

Many farmers are waiting for stronger prices, he said.

One grain analyst estimates about 65 per cent of the western Canadian wheat crop has yet to be marketed, adding it will be difficult for CWB to procure some of that wheat because “they’re not paying high enough prices.”

And grain elevators have an advantage, he said.

“The elevator managers for the grain companies know exactly what producers shipped through the wheat board last year,” the analyst said. “And when you see that information right in front of you, you can go in front of CWB and use your sales technique savvy to show the producer that if he delivers his wheat to the non-board market he’s going to make more money.”

The CWB will continue to focus on procuring grain through its cash contracts for the remainder of the year, Flaten said.

“We’ve had pretty positive feedback on our pools and our programs so far, so I expect that we’ll look at similar programs for next year,” he said. “But we’re going to keep our minds open and respond to what farmers tell us.”

About the author

Columnist

Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

Comments

explore

Stories from our other publications