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Arable Farming
Cropping
2016/17 milling wheat premiums
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<blockquote data-quote="Condi" data-source="post: 1928442" data-attributes="member: 13446"><p>This is getting increasingly pointless and not showing anyone in a good light. </p><p></p><p>Im not disputing what the farmer says, what Im saying is that people, seemingly including you, dont understand how they work. I agreed that what the farmer had been told was correct - its not pulling the wool over anyone eyes. Let me explain...</p><p></p><p>Avon 4 wheat is bid +1 futures, Hereford/Clearwell is therefore worth the same. Worcester to Hereford is going to be £6-7 haulage. Worcester to ADM Avonmouth will be nearer £9 or £10. Hence £4/t difference in haulage costs (£6vs£10). </p><p></p><p>If you price it Portbury vs Avonmouth, or Cerestar vs RHM then obviously the difference will be £1 at most, but you surely price the feed off the best home (Hereford) and the milling off the closest/best milling home, and so hence the difference in base price? <em>EVERY</em> merchant who offers these contracts does the same, aside from ADM who offer min 15 or min 20 depending on distance from one of their mills. </p><p></p><p>Anyway, whatever. I cant make it any more simple. You appear to be trying to discredit the contract, and the merchants who offer them. </p><p></p><p></p><p></p><p>Suffice to say any farmer who finds any min/max's for next year should lock into them considering the amount of G1 wheat in the ground looking good. If you dont understand how they work talk to your merchant and they will explain, or fix at a known discount to futures. No merchant wants to 'pull the wool' over anyones eyes, as all that does is create bad feeling to one party. But at the same time, the min/max product is different to a normal feed wheat contract and so has different terms. You can borrow money from a bank at many different interest rates, costs etc. Its the same idea - different products for different customers.</p></blockquote><p></p>
[QUOTE="Condi, post: 1928442, member: 13446"] This is getting increasingly pointless and not showing anyone in a good light. Im not disputing what the farmer says, what Im saying is that people, seemingly including you, dont understand how they work. I agreed that what the farmer had been told was correct - its not pulling the wool over anyone eyes. Let me explain... Avon 4 wheat is bid +1 futures, Hereford/Clearwell is therefore worth the same. Worcester to Hereford is going to be £6-7 haulage. Worcester to ADM Avonmouth will be nearer £9 or £10. Hence £4/t difference in haulage costs (£6vs£10). If you price it Portbury vs Avonmouth, or Cerestar vs RHM then obviously the difference will be £1 at most, but you surely price the feed off the best home (Hereford) and the milling off the closest/best milling home, and so hence the difference in base price? [I]EVERY[/I] merchant who offers these contracts does the same, aside from ADM who offer min 15 or min 20 depending on distance from one of their mills. Anyway, whatever. I cant make it any more simple. You appear to be trying to discredit the contract, and the merchants who offer them. Suffice to say any farmer who finds any min/max's for next year should lock into them considering the amount of G1 wheat in the ground looking good. If you dont understand how they work talk to your merchant and they will explain, or fix at a known discount to futures. No merchant wants to 'pull the wool' over anyones eyes, as all that does is create bad feeling to one party. But at the same time, the min/max product is different to a normal feed wheat contract and so has different terms. You can borrow money from a bank at many different interest rates, costs etc. Its the same idea - different products for different customers. [/QUOTE]
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2016/17 milling wheat premiums
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