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| A few comments. PNW wheat get exported to Japan, Phillipines, South Korea, Tiawan, Yemen etc. Who buys from the locals? The locals elevators generally sell there grain delivered to a destination that makes there grain worth the most at their facility. In your neck of the woods, PNW, LA Calif, and Chicago for beyond would all be viable. Let me tell you a bit about freight. The railroads capacity is not unlimited. The majors "buy" capacity to make shipments. They do this on the BNSF for example by taking every shipment on a 110 car shuttle train for 2 years. These tend to turn 3 times per month. So the players make a commitment to buy, ship, and sell about 30 million bushels per year. This is one train. BNSF has around 100 trains operating in this mannor. So what does that cost? Changes daily but let me give you another example. 30 days ago you would have had to pay $2000 per car to load a BNSF train in October..Today you could buy a empty train in the PND for zero dollars per car and order that train into your facility. Thats a $220,000 spread. Cheaper today.. The basis and the price of freight move in the same direction. Also, not sure where the info is coming from but PNW HRWW is not + 1.20. More info, also in the market today is the lack of additional port elevation capacity to ship grain out of the USA. Russian wheat is a mess. They normalls ship 30% of the world wheat trade and have stopped exports. The world is coming to the USA to buy wheat and likely corn. Futures prices run and the basis can not keep up. 80% of the US wheat crop has been sold in 3 months...The buyers want it over twelve months and the elevator has a feed grain crop to handle. One more comment..If you have ever sold a ship of wheat to a customer who is 40$/ton in ocean freight away from USA and the ship gets there and they find a bug or a treated seed, or whatever then what do ya do? Thats how it happens especially when the price has gone down..Read the post from the guy a day or two back about signing his grain contract after he made a verbal deal and then the price went up....Now if he was in Yemen how do ya suppose you get your money? And what do ya do with a 55,ooo ton ship sitting in a South Korean port that they refuse to unload? Ships are trading for abbout $35,000 /day for a 55,ooo tonner...Ya dont get a lot of time to figure things out. So my point is that their is so much that the general population does not understand about the grain business. from afar it looks pretty simple. | |
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who buys the wheat?
