Harvest cash wheat prices as of noon on Friday, July 22, 2016 are as follows:
SWW @ $176.99/MT ($4.82/bu)
HRW @ $172.16/MT ($4.69/bu)
HRS @ $208.91/MT ($5.69/bu)
SRW @ $176.99/MT ($4.82/bu)

Marketing Education
Options on Futures: Lesson 18:
Option choices for protection against price deadline
For our second farmer’s hedging option strategies, we require a different set of priorities based on this farmers beliefs of future price activity in the soybean market. Although farmer number two is looking for some downside price protection, this is not his priority. Like the first farmer, farmer number two wishes to lock in a minimum floor level as protection, but his focus is on his expectations of much higher prices and the best method to capitalize on such an outcome.
 
As we mentioned before, every farmer’s idea of success is different, and although some farmers may be content with covering all costs and making a reasonable profit, there are many who want much more for their efforts and therefore may wish to take more risk in the form of less price protection. This is where each farmer needs to decide what their expectations of profitability will be based on where they feel future crop prices will be trading at and which strategies will give you the best chance for success based on your individual beliefs of future price movement.
 
Our second farmer will be looking to buy less expensive options as insurance only against severe downside price movements because of his strong belief that the markets will move much higher. By buying out of the money options, farmer number two will acquire less price protection but at a lower cost or option premium than farmer number one. Higher prices is this farmers belief and his first priority. This particular option strategy ensures minimal protection in case the markets should have a severe setback, while allowing him to maximize upside profits if he is correct in his assessment of much higher prices in the current season.  
 
Next week we will compare farmer number one and his option strategy based on his expectations of future crop prices, and farmer number two and his chosen option strategy based on his outlook of future crop prices. We will also see how they compare if prices reacted differently than expected for each farmer. •
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Feedback is important.  If you find this education series beneficial, please contact Marty Hibbs, Grain Merchandiser at mhibbs@gfo.ca.

DISCLAIMER: This information has been compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made by the author, by Grain Farmers of Ontario, or by any other person as to its accuracy, completeness or correctness and Grain Farmers of Ontario accepts no liability whatsoever for any loss arising from any use of same. •

The federal government is developing a new Agricultural Policy Framework (APF). Growth in the grain and oilseed sector will increase jobs and economic activity in rural areas that depend on farming and provide a greater contribution to Canada's GDP. An APF designed to provide strategic investments in Ontario grain and oilseed farming will help farmers realize these economic opportunities for Canada and support grain and oilseed farmers' contributions to Canada's climate change goals. This includes business risk management such as income stability programs and Agri-Insurance; as well as non-business risk management programs such as research and commercialization, environment and climate change, and market development.

You can read details of Grain Farmers of Ontario’s recommendations for Canada’s next APF online at http://gfo.ca/Government-Relations/Government-Relations-Programs. This week, these recommendations were also shared with Jeff Leal, the Ontario minister of agriculture, food and rural affairs. •

With wheat harvest well underway, the call volume coming into Grain farmers of Ontario’s wheat desk has increased. If you are calling and get to our voice mail, it most likely means we are already on a call. Please leave a voice mail message and we will return your call as quickly as we are able.  Thank you for your patience.

To contact the wheat marketing department, call 1-800-265-0550.

An important reminder: Grain Farmers of Ontario will not accept wheat treated with Manipulator™ (chlormequat chloride). •

Ontario’s bees overwintered well this past year, as losses of only 18% were reported by the Canadian Association of Professional Apiculturists this week.

Nationally, average overwintering losses were 17%, putting Ontario on-par with the rest of the country and several provinces reporting significantly higher losses than this province. The top two reasons for bee losses noted by Ontario beekeepers were poor queens and starvation.

"We are pleased to see these promising numbers for bees in our province,” says Mark Brock, chair of Grain Farmers of Ontario. “This year’s losses are less than half of what was experienced the previous year."

When considering the impact of weather, Ontario’s overwintering losses appear higher following severe winters and lower following mild winters. For instance, low losses (only 12%) were reported during the mild 2011/12 winter, while higher losses (over 30%) were reported during the following two long, harsh winters. This past winter brought moderate weather, and continuing this trend, brought lower bee losses.

"It is worth noting that the most recent overwintering numbers are prior to Ontario’s seed treatment regulations being in place," says Brock. "As we continue to see data that indicates strong bee populations and numerous bee health factors, it reinforces that Ontario’s rush to restrict neonicotinoids was unnecessary." •

It was a busy week to showcase the Ontario grain industry. On Tuesday, the University of Guelph wheat breeding program open house was held in conjunction with the Master Brewer’s Association of Canada annual barley field day. Grain Farmers of Ontario staff attended the Brewers' meeting to hear about supply challenges related to using Ontario barley and learn about the status of the barley crop in other parts of the country. The tour of the Elora Research Station highlighted the work of Dr. Ali Navabi, who holds the Grain Farmers of Ontario professorship in wheat breeding, and his team. In addition to new wheat lines, they are also researching disease resistance to Fusarium head blight and stripe rust.

On Wednesday evening, Grain Farmers of Ontario staff attended the Cribit Seeds open house for an update on oat and barley markets and the research being conducted on-site. •

Grain Farmers of Ontario has launched a new video series – Inside Grain Farmers of Ontario. This weekly update features interviews with staff to highlight news and activities from the different departments within our organization. Check for our latest video here. This week we highlight our investment in wheat breeding with the Research and Innovation department. •