Is PDQ pricing accurate?

PDQ operates with pricing information received directly from the majority of grain buying companies in Canada to provide as accurate and transparent public price reporting of regional crop price values. The actual value of grains at delivery locations will vary within a region based on the local supply and demand situation. By providing regional averages, PDQ is designed to provide an indication of current regional crop pricing and recent price movements.

Should you note a concern with the posted data, we encourage you to alert us through info@albertawheat.com.

How does PDQ confirm the data received?

PDQ checks for and filters out any obviously erroneous data. Commission staff will further review data if credible concerns are raised . Please note that data submitted to PDQ does not include any basis deviation decisions made by individual elevators, such as pricing “specials”, unless they are reported through the head office.

How does PDQ determine grading and protein spreads?

PDQ does not receive updates on grading and protein spreads. This information is updated based on information collected by staff.

Is pricing information edited after the daily update?

Edits to pricing information may occur outside a regular daily update if errors or omissions are identified in the submitted data by either staff or the submitting grain company.

Why does PDQ pricing data have some gaps?

From time to time, prices for specific crops in specific regions will be missing.  To ensure the integrity of the data being reported, pdq requires a minimum number of firms to be reporting.  In the event that there are less than three firms bidding for a specific crop, in a specific delivery period, in a specific region, pdq will not report a price for that crop in that region for that crop and delivery period.

How does AFSC Crop Insurance use PDQ?

AFSC Crop Insurance uses specific PDQ pricing info when calculating fall settlement pricing on roughly 90% of insured acres (CWRS wheat, CPS wheat, Durum, Yellow Peas, Canola, Barley and Oats). Fall Pricing is calculated via averaging price reporting throughout the month of October.

Is PDQ pricing used by AFSC Crop Insurance for Spring Insurance Pricing?

The Market Analysis Group (MAG) which is part of Agriculture and Agri-Food Canada (AAFC) provide the Spring Insurance Prices (SIPs) for crops eligible for Variable Price Benefit (VPB). The SIPs are estimates of what will happen in the fall based on global and local supply and demand information like planting estimates, carry in and stocks/use, forward and futures contracts and other sources of information.

How did AFSC Crop Insurance calculate Fall Pricing before PDQ?

Before PDQ was created, Fall Pricing for wheat relied on the Minneapolis Grain Exchange (MGEX) nearby contract with a basis applied. Canola used the Intercontinental Exchange (ICE) with a basis applied and Oats used the spring to fall price ratio for barley as a proxy. The accuracy of insurance settlement prices has increased tremendously since PDQ launched and provided a stable, transparent price source for major crops.

Which pricing info is used for AFSC Crop Insurance?

AFSC insurance is designed to use a single price per commodity for the province of Alberta. AFSC currently uses a specific region per specific crop in this calculation. The regions per crop are:

• CWRS Wheat: Northern Alberta
• CPSR Wheat: Northern Alberta
• Durum Wheat: Southern Alberta
• Canola: Northern Alberta
• Yellow Peas: Northern Alberta
• Barley: Northern Alberta
• Oats: Northern Alberta

APPLE

1. Open PDQ in your web browser on your portable device.
2. Select the function box along the lower menu bar of the browser and tap on the image of the square with the arrow pointing upwards.
3. Scroll across the lower row of icons and select the one that says “Add to Home Screen”. This will create a quick link to PDQ on your Home Screen.
4. Select “Keep me logged in” on the PDQ log in window to remain on the site from use to use.

ANDROID

1. Bookmark the page you want on your home screen.
2. Long hold on home screen.
3. Click shortcut
4. Pick the bookmark you want.

http://www.howtogeek.com/196087/how-to-add-websites-to-the-home-screen-on-any-smartphone-or-tablet/

PDQ has been designed using Responsive Web Design (RWD). This is an approach to web design aimed at crafting sites to provide an optimal viewing and interaction experience—easy reading and navigation with a minimum of resizing, panning, and scrolling—across a wide range of devices (from desktop computer monitors to mobile phones and tablets).

This means the PDQ site will adjust the screen based on the type of device you are using. (phone, tablet, desktop). By accessing PDQ in this manner it will offer all the characteristics of an “app” with the full functionality of a webpage.

Exchange                                                             Code

ICE Futures Canada (Winnipeg)                     (no exchange code)

Minneapolis                                                            M

Kansas                                                                   KE

Chicago                                                        (no exchange code)

Commodity                                                        Code

Spring Wheat                                                       W

Canola                                                                 RS*

Corn                                                                      C

Soybeans                                                              S

Month            Code

January            F

February          G

March               H

April                  J

May                  K

June                 M

July                   N

August              Q

September        U

October             V

November          X

December          Z

Year

The last two digits represents the calendar year in which the contract is deliverable IE ‘16’ represents 2016. An example:  The code December (Z) 2015 wheat (W) futures traded at the Minneapolis Grain Exchange (M) is MWZ16.

*  The code for canola is RS, which was the code for the earlier version of canola – rapeseed.

Regional Prices – The simple average of all spot (current month) prices in a described region.  Bid prices are provided electronically by the majority of grain buyers for each buying location.  All prices are aligned to a common grade before averaging.

Deferred Prices – The simple average of all deferred delivery prices in a region for each specific calendar month. All prices are for the same grade as the spot regional prices.

Deferred Basis – The difference between the PDQ calculated average regional prices and corresponding futures contracts, applied to all delivery positions, spot and deferred.

End of Day Futures – Open, High, Low and Closing Prices along with the Change from the previous day for selected futures market commodities. Price information is posted once daily after market settlement.

Base Grade – This is the specific grade and quality of a commodity represented by the price posted on the PDQ site. IE 1 CWRS Wheat 13.5% protein.

Grade Spreads – The average premium or discount for various grades of grain relative to the PDQ base grade.  Market spreads are collected from numerous buyers from time to time.

Forex – the exchange rate between the Canadian and US dollar displayed as either Cdn/US or US/Cdn at the user’s preference.

Widget – An information box, selectable in the “Widget Administration” section of the Dashboard. Each widget contains more detailed information on elements of data that are components of price or influential in the determination of price.

Normalize – The process of adjusting grain bids for different grades to the common PDQ base grade before calculating average regional prices.

Freight rates were also influential, with a predominantly east-west differentiation with some consideration for southern markets.  The regions are not provincially-based; regions cross over provincial borders where pricing factors dictate.

pdq pricing regions are based on locations rather than geographical shapes so there are no specific lines on a map delineating the regions.  When a user is located close to buying locations in more than one region, it makes sense to monitor pdq regional prices in all nearby regions. Sometimes natural borders influence the flow of grain to market but most often the deciding delineation is based on rail line service and highway access.

One other variable is the presence of domestic demand such as feed markets or processing facilities. These buyers tend to have a strong local influence on price, creating the need for recognition in defining a specific region.

Locations on the map are tagged with longitude and latitude bearings for ease in locating.

On CWRS, most buyers’ base grade is #1 CWRS 13.5, however, one uses #2 CWRS 13.5 and yet another uses #2 CWRS 12.0.  This creates potential inconsistencies in calculating an average price for that grain, particularly at times when the grade spreads widen.  To solve this, pdq “normalizes” the bids, according to prevailing grade spreads, to create bids from all buyers for a consistent grade. 

For example, as pdq’s selected base grade for CWRS is #1 CWRS 13.5, the prices received from a buyer who uses #2 CWR 12.0 as their base grade will be adjusted. If that buyer’s grade spread between #2 CWRS 12.0 and #1 CWRS 13.5 is, say $0.15/bu (meaning their base grade bid is $0.15/bu below their #1 CWRS 13.5 price), pdq will add $0.15/bu to the reported bids from that company.  This way, the bids from that company that are contributing to the regional average will be of a consistent grade with all other bids.

Grade spreads don’t change very often.  Pdq canvasses the trade periodically to remain current on prevailing grade spreads for each company.

Buyers are quite consistent regarding which futures are used for pricing, and, although there may be times when a buyer (or buyers) may opt to use a different contract for a time, pdq is consistent in the contracts it uses for basis calculations:

• Canola          ICE Futures Canada canola futures
• CWRS           Minneapolis Grain Exchange spring wheat futures
• CPSR             Kansas City Board of Trade winter wheat futures

Although the convention of the trade is to set cash prices relative to the nearby corresponding futures month, there is no standard approach and this may not be consistent across all buyers at all times.  Therefore, rather than using each buyer’s basis, pdq calculates a regional basis using the most conventional futures month at the time.

Spot price:  pdq uses the nearby futures month that most of the buyers are using, until either (1) the buyers switch to another month, or (2) two weeks prior to the first delivery day of the futures, whichever occurs first.  At this time, pdq changes to the next deferred futures contract to calculate and post regional basis. 

Deferred prices:  For each delivery month, pdq uses the futures contract month that is used by most buyers.  If there is no consistency among buyers, pdq uses the closest futures month following the delivery month.  Prices for delivery in the same deferred month as a delivery month (ex: March delivery of canola) are basis that same futures month.

Pdq calculates regional basis by deducting the daily closing futures price of the selected futures contract month from the pdq calculated regional average cash price for that day.  This results in a regional basis relative to one futures month (even though different buyers may be using different futures). 

It should be noted that, at times, although the cash price of a buyer is reasonably close to the pdq regional average, the pdq calculated basis may be significantly different than the buyer’s basis due to the fact that the buyer is using a different futures month to express their basis.

All grain buyers that participate in pdq provide their daily bids at approximately 2:00pm CST each day.  This time of day was selected as it is after the close of futures for the day and all prices for the crops that have prices based on a futures contract – CWRS, CPSR and canola – are set then until futures begin trading again.

The price information that pdq receives from each buyer includes:

• The base grade used by the buyer.  There is no set standard grade among buyers (except on canola).  Each buyer provides their price information for their particular base grade.  Pdq makes adjustments to these prices – based on prevailing grade spreads – in order to get a common grade price.  This is covered in more detail below.
• The delivery location of the bid.  Every location that the buyer is presenting a public bid for that crop is represented in the pdq calculation.
• All deferred prices.  Most buyers will have bids for delivery in a number of future delivery periods (usually monthly), representing forward contract prices which are often different that the spot price.  The number of delivery months being reported to pdq varies depending on the crop and the buyer.  Pdq reports as many as are available, which tends to be at least nine months out.

Once all prices are received, pdq groups all the individual location prices into the predetermined regions, based on the location of the bid.  Within each region, pdq calculates a simple average of all bids received, for each delivery period.  These regional average prices are the prices that pdq reports for each region.

When prices are missing from pdq

From time to time, prices for specific crops in specific regions will be missing.  To ensure the integrity of the data being reported, pdq requires a minimum number of firms reporting.  In the event that there are less than two firms bidding for a specific crop, in a specific delivery period, in a specific region, pdq will not report a price for that crop in that region for that crop and delivery period.

Regarding this unusual situation, the convention of the trade appears to be unconventional.

Most buyers report their basis as simply the difference between their bid and the futures price, regardless of the fact that their bid is in Canadian dollars and the futures are in US dollars.  For example, if their bid for CWRS is $6.75/bu (Canadian) and the relevant futures price is 5.50/bu (US), their reported basis is 1.25 over the futures (6.75-5.50).

At least one buyer reports their basis differently; they convert the futures price to a Canadian dollar value, using prevailing exchange rates.  Using the example above, using an exchange rate of 0.7500, the futures price of 5.50 (US) becomes 7.33 (Canadian).  Using this as the futures price, a cash price of 6.75 (Canadian) then has a reported basis of 0.58 under the futures.

For consistency and to reflect the majority of the market, pdq adheres to the simple approach where the basis is the simple difference between the cash bids and the futures price, regardless of currency differences.