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Grain Market Letter

UNIONTOWN CO-OPERATIVE ASSOCIATION

involved will have to determine if they were profitable. The "hedge to arrive" contracts were around the mid-west corn areas about ten to fifteen years ago. The contract puts the responsibility for the futures sale on the elevator. Because the market didn't go the way is was expected to go, several elevators went bankrupt and the question of risks went as far as the National Grain and Feed Assn., the Commodity Futures Trading Commission and even Legislative Committees on the State and Federal level looked into the contracts. The contracts are not necessarily bad but you will want to understand how they work and your responsibility in them. I have printed out several articled from the internet that if you would like them, come in and I will make you a copy or "google" "hedge to arrive" contracts on your computer and there is a whole list of articles about them. Barley prices have moved down a little from the high but the prices is still as high as I have seed it in a long time. New crop barley has been $138.00 per ton delivered Portland.

SPRING SEED NEEDS:
It is probably not too early to be thinking of your spring seed needs. If there is anything we can begin looking for, please let us know.

OFF COAST CHARGES.
The fuel surcharge for January will be 14% up 5% from December. The off coast charges for January will be:
Wheat at Uniontown: $ .52 cents per bu.
Barley at Uniontown: $23.00 per ton.
Wheat at Lewiston: $ .34 cents per bu.
Barley at Lewiston: $15.00 per ton.
These off coast charges include ALL charges.

ON BEHALF OF YOUR BOARD AND STAFF AT YOUR COOPERATIVE….WE WOULD LIKE TO WISH ALL….A VERY MERRY CHRISTMAS SEASON AND A BLESSED 2007. THANK YOU! FOR ALLOWING US TO SERVE YOUR NEEDS.

VERY COOPERATIVELY YOURS:
UNIOTOWN CO-OPERATIVE ASSOC.

December 13, 2006

TO OUR MEMBERS AND PATRONS:

sh SWW despite the up and down movement in the futures markets have held fairly well. They are down from their late October highs and are now doing what they normally do this time of year and that is move a little lower prior to the holiday season. The SWW price has moved lower by about 35 cents from the high and the Chicago futures have moved down nearly 70 cents from their high. Bottom line is the basis has improved 35 cents. The "Funds" continue to dominate the futures activity and are still carrying long positions in most of the markets. Don't be surprised to see them continue to take profits prior to the first of the year. A little export business for SWW is taking place. Egypt has taken several SWW cargos in their recent tenders for January delivery. We are still carrying W/R grain for exporters and probably will continue to keep grain up country for them for awhile. We could see a late December rally in the cash price for SWW but I would guess that we could slip very quietly into January with not a lot of activity on the up side. We have seen some exporters quoting markets for as far out as August 08. There are no export sales going on that far out however the exporters are comfortable buying flat price grain at some historically cheap basis levels after they hedge the purchases. This has brought into the mix another, new to our area, contract or the "hedge to arrive" contract. In this type of contract you "fix" the corresponding futures portion of the flat price sale. There may or may not be a charge for doing this. You can accomplish the same thing by selling futures or buying puts yourself. If you do it yourself and find that you want out of the transaction you just purchase the futures position back which may not be available with the "hedge to arrive" contract. We saw some activity in this type of contract last year and each one

UNIONTOWN CO-OPERATIVE ASSOCIATION

	involved will have to determine if they were profitable. The "hedge to arrive" contracts were around the mid-west corn areas about ten to fifteen years ago. The contract puts the responsibility for the futures sale on the elevator. Because the market didn't go the way is was expected to go, several elevators went bankrupt and the question of risks went as far as the National Grain and Feed Assn., the Commodity Futures Trading Commission and even Legislative Committees on the State and Federal level looked into the contracts. The contracts are not necessarily bad but you will want to understand how they work and your responsibility in them. I have printed out several articled from the internet that if you would like them, come in and I will make you a copy or "google" "hedge to arrive" contracts on your computer and there is a whole list of articles about them. Barley prices have moved down a little from the high but the prices is still as high as I have seed it in a long time. New crop barley has been $138.00 per ton delivered Portland. SPRING SEED NEEDS: It is probably not too early to be thinking of your spring seed needs. If there is anything we can begin looking for, please let us know. OFF COAST CHARGES. The fuel surcharge for January will be 14% up 5% from December. The off coast charges for January will be: Wheat at Uniontown: $ .52 cents per bu. Barley at Uniontown: $23.00 per ton. Wheat at Lewiston: $ .34 cents per bu. Barley at Lewiston: $15.00 per ton. These off coast charges include ALL charges. ON BEHALF OF YOUR BOARD AND STAFF AT YOUR COOPERATIVE….WE WOULD LIKE TO WISH ALL….A VERY MERRY CHRISTMAS SEASON AND A BLESSED 2007. THANK YOU! FOR ALLOWING US TO SERVE YOUR NEEDS. VERY COOPERATIVELY YOURS: UNIOTOWN CO-OPERATIVE ASSOC.
December 13, 2006 TO OUR MEMBERS AND PATRONS: sh SWW despite the up and down movement in the futures markets have held fairly well. They are down from their late October highs and are now doing what they normally do this time of year and that is move a little lower prior to the holiday season. The SWW price has moved lower by about 35 cents from the high and the Chicago futures have moved down nearly 70 cents from their high. Bottom line is the basis has improved 35 cents. The "Funds" continue to dominate the futures activity and are still carrying long positions in most of the markets. Don't be surprised to see them continue to take profits prior to the first of the year. A little export business for SWW is taking place. Egypt has taken several SWW cargos in their recent tenders for January delivery. We are still carrying W/R grain for exporters and probably will continue to keep grain up country for them for awhile. We could see a late December rally in the cash price for SWW but I would guess that we could slip very quietly into January with not a lot of activity on the up side. We have seen some exporters quoting markets for as far out as August 08. There are no export sales going on that far out however the exporters are comfortable buying flat price grain at some historically cheap basis levels after they hedge the purchases. This has brought into the mix another, new to our area, contract or the "hedge to arrive" contract. In this type of contract you "fix" the corresponding futures portion of the flat price sale. There may or may not be a charge for doing this. You can accomplish the same thing by selling futures or buying puts yourself. If you do it yourself and find that you want out of the transaction you just purchase the futures position back which may not be available with the "hedge to arrive" contract. We saw some activity in this type of contract last year and each one