Time may be running out for farmers who want to cash in on high wheat prices.
Producers have until Jan. 31 to sign up their wheat to a Series B contract with the Canadian Wheat Board.
While there will be a Series C contract later in the year, there’s no guarantee that wheat signed up to that later contract will be sold at prices now available.
As for Series B wheat, the board says it intends to sell and move as much of it as it can, as quickly as it can.
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“What we’re saying is we think it’s in farmers’ interests, and it certainly works for us better, to have commitments on the B,” said Ward Weisensel, the board’s chief operating officer.
“We’re trying to maximize returns through aggressive sales at current high values prior to new-crop arrival.”
As of last week, only about 300,000 tonnes had been signed up to the B contract, significantly below the board’s expectations.
However Weisensel wasn’t pushing the panic button, saying it’s traditional for farmers to wait until the last minute to sign contracts.
“It’s a very preliminary number,” he said. “People always seem to like to wait until the end.”
It’s also possible that with a small wheat crop in 2007, deliverable wheat supplies may be lower than anticipated.
So far, about 50 percent of the Series A has been called for delivery and Weisensel said it may be “a little bit of time yet” before another call is issued.
He added that movement of hard red spring wheat has been improving since early December, with 2,000 rail cars a week moving to all destinations, including the west coast, St. Lawrence ports and the United States.
“That’s a very solid number and people are going to start seeing the effects of that very rapidly in the country,” he said, as wheat is moved out and elevator space opens for more deliveries.
However, Weisensel said the board has been “quite disappointed” by overall rail performance this crop year and has made those views known to the rail companies, as have shippers of other commodities.
“We have incurred some demurrage we think was unnecessary given the type of program we were shipping and the type of weather we were operating in,” he said.
Demurrage refers to penalties paid by the board to vessel operators when grain loading is delayed beyond contractual deadlines.
The board expects to export 17 million tonnes of grain in 2007-08, including 10.9 million of wheat, 3.1 million of durum and three million of barley.
That’s 1.5 million tonnes below the previous year but in line with the five-year average of 17.7 million tonnes.
Slightly more than half the program had been exported by Dec. 31, 2007. The board has set a target of shipping 90 percent by the end of May.
