THURSDAY, MAY 22, 2014
VOL. 92 | NO. 21 | $4.25
Batter’s up Muenster inducted into Sask. Baseball Hall of Fame for sport efforts | P. 19
Former Pool president tells all Ted Turner publishes memoirs of SWP | P. 28
GROWING WITH FARMERS FOR 90 YEARS
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UP TO HIS ELBOWS IN WORK
TRANSPORTATION | GRAIN FLOW
Rail regulations working, says watchdog Western rail shipments of grain set new record BY BRIAN CROSS SASKATOON NEWSROOM
Regulations aimed at increasing the flow of grain to market are having their intended effect, according to the federally appointed monitor of the western Canadian grain handling and transportation system. West coast terminals set an all-time record for weekly grain car unloads in early May, said Mark Hemmes, president of Quorum Corp. “In Week 39 … total west coast unloads were 6,740,” Hemmes told members of the Senate agriculture committee in Ottawa last week. “That is the best week we’ve ever seen, in history, on the West Coast.” Hemmes said shipments of western Canadian grain have increased significantly since early March, when Ottawa imposed an order requiring the country’s major railway companies to move one million tonnes of grain per week or face fines as high as $100,000 per day.
Mark Matejka artificially inseminates one of his cows May 13. He has Red and Black Angus and Horned Hereford on his farm near Ponoka, Alta. |
SEE REGULATIONS WORKING, PAGE 2
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MARY MACARTHUR PHOTO
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MARKETS | BASIS LEVELS
Wait on wheat worthwhile Only a matter of time | Seeding expected to force grain companies to make deliveries more attractive BY SEAN PRATT SASKATOON NEWSROOM
The adage that good things come to those who wait is particularly apt for Canadian wheat growers this year, says an analyst. “If farmers have the storage, I mean, there’s no question at some point that basis levels will gain $60 (per tonne),” said Chuck Penner with LeftField Commodity Research. “That’s a way to earn $2 a bushel right there.” Canola basis levels have improved a fair amount in the last few weeks. “From a long-term perspective, they’re kind of reasonable right now,” said Penner. “It’s wheat that has kind of stupidwide basis levels right now.” Canadian hard red spring wheat
has levels that are $80 to $90 per tonne under the Minneapolis spring wheat futures price. “That needs to narrow a lot,” said Penner. By comparison, dark northern spring wheat in North Dakota is $33 per tonne under the futures values. “There is still a huge disconnect in the market,” said Penner. Marlene Boersch, partner in Mercantile Consulting Venture, thinks Canadian basis levels should have improved more than they have based on recent grain movement. Commercial stocks of wheat held by primary elevators was 1.59 million tonnes as of Week 40, which is down 22 percent from the stocks held in Week 32. “Presumably we would want to replace the stocks in the elevators and keep moving to the ports,” she said.
That would require attractive pricing to pull in wheat from over-stuffed bins, but that isn’t happening. Boersch said the cash price paid for No. 1, 13.5 percent protein wheat in Canada as of May 11 was $75 per tonne below world price value. At one point in the winter, the spread was more than $100 per tonne. “There have been improvements, but there is lots of room to go,” she said. “There’s still so much grain (out) there that (grain companies) don’t really have to reflect world prices to get it.” She believes part of the problem is that the railways are not living up to the government-mandated weekly shipping targets. There were 731,300 tonnes of grain in transit in the western rail system in Week 40, according to the Canadian
Grain Commission. That amounts to 8,126 rail cars, assuming 90 tonnes per car, which is well short of the government’s 11,000 car mandate, said Boersch. “Are we fine? I don’t think so,” she said. “Where are the teeth to the legislation?” Mark Hemmes, president of Quorum Corp., which monitors western Canadian grain transportation for the federal government, thinks the railways are meeting their weekly targets. The grain commission tracks only shipments out of primary elevators. The government mandate includes shipment of all Schedule II grains, which includes value-added products such as canola oil shipped by crushing facilities. SEE WAIT ON WHEAT, PAGE 2
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MAY 22, 2014 Return undeliverable Canadian addresses to: Box 2500, Stn. Main, Saskatoon, SK. S7K 2C4