Frequently Asked Questions

I have about 8,000 bushels of winter wheat in storage. The wheat suffered rain damage before harvest, and now has about 16 per cent sprout damage. What is the market for this at the moment? I have access to the United States, since the farmland is just north of the Montana border. Is there a better market for it there than Alberta?

If the Falling Number is below 250, your best alternative is going to be the local feed market on either side of the border.

A high level of sprouting probably means that the Falling Number (FN) is well below what a flour mill would normally accept. Typically, milling specifications are going to look for a minimum of 300 FN, though at times mills can work with something as low as 250. First, get an independent grain lab to test a representative sample for FN so you know exactly what you’re working with. If you have 16 per cent sprout damage, my sense is that we already know the answer. FN is extremely difficult to blend, as it isn’t a one-to-one blend. For example, if you have a load of 400 FN and a load of 200 FN, you don’t get 300 when you put them together. Chances are the blend would be closer to 220 – so now there are two loads of non-milling quality wheat. If the FN is below 250, your best alternative is going to be the local feed market on either side of the border.

Phil Oswald

How is foreign exchange handled differently for different crops?

At Cargill, we take the foreign exchange risk for you. Remember, all grain is traded in U.S. dollars.

How can I price and sell barley after the New Year?

This year, there's no shortage in supply and feedlots are buying hand to mouth. However, there may be some opportunities to sell if bad weather hits.

Will there be any upside to Hard Red Spring Wheat?

The short answer is no. The long answer is that there are plenty of options out there for world wheat buyers as we move toward our summer months.

Does Cargill use an accurate open interest indicator?

We follow the open interest data as reported by ICE Futures Canada. It shows changes in open interest, which helps us analyze market influences.

How do I know what the local basis levels is?

Finding local basis is easier than ever – visit www.cargillag.ca for futures pricing and local basis for our major commodities.

How do you determine the price of grain?

Basis and Futures determine the price of grain. Basis accounts for 10 – 20 per cent of the price, while futures accounts for the other 80 – 90.

What can cause volatility in grain markets?

There are three major factors that influence grain prices in general: weather in production areas, the global economy and government policies.

How do world markets affect the price of durum?

Canada largely influences world values for durum. However, when North Africa has a large crop, there is less global demand and a lower price for us.

Can I book a contract for a certain grade and protein level of wheat?

There may be the odd occasion when we do want to lock in a specific grade/protein to match up with a specific sale.

Do farmers with large volumes of grain get preferred access?

Farms of all sizes will have the same access to delivery opportunities. Communicate with your local elevator about what they’re looking for.

Can I deliver all my production off the combine?

In some years you could potentially do that, but it depends on a number of factors: your price expectations, storage capacity and cash flow.

How can I beat the market?

Trying to beat the market makes grain marketing even more challenging. Start by establishing your production costs and revenue goals.

What is Cargill's base grade for wheat?

We use No. 2 grade with a protein content of 13.0 per cent because we believe it creates more opportunity for quality premiums than discounts.

Where can I sell wheat with high sprout damage?

If the Falling Number is below 250, your best alternative is going to be the local feed market on either side of the border.

How does a Grain Pricing Order work?

At its simplest, a Grain Pricing Order is a target price with two components: futures price and local Cargill basis.