CWB Guaranteed Delivery Contracts?

[charliep]

I do ask these questions and generally get the same response you would. More often, the programs are announced and I scramble like everyone else to understand them. I do have phone numbers and use them to ask questions.

Should read more but I see from this week' bulletin the CWB will have a series "A" feed wheat contract. Will put the link below but the normal signup by October 31, assessent of the market by middle of November and % call there after. I won't ask the general questions but why so many programs? The CWB has to have a logistically efficient system that attracts feed wheat forward from your bins on a boat by boat basis. It would seem everyone (grain companies, the CWB) sits on their hands with no activity until you the farmer have made a delivery commitment. You (the farmer) are asked to make a delivery commitment with no price involved - just blind faith. At the same time, there is a domestic feed market that competes for your product with a daily price (spot and forward bids). And then everyone wonders why the system doesn't work.

I see everyone getting excited about fertilizer/managing risk by forward pricing. Yet asking farmers to sign CWB feed wheat contracts with an initial payment of under $1/bu and no guarantee on final is quite acceptable. On the delivery side, you as a farmer are stuck with the choices of commit to volume with no guarantees of delivery access by the CWB or hope you nearby terminals get offered GDC contracts through the year.

The link.

[URL="http://www.cwb.ca/public/en/farmers/popups/series_contract.jsp"]series A feed wheat[/URL]

[charliep]

When I am doing most of the posting, I should ask why. Numbers are too interesting.

Here is my calculation on feed wheat using an fpc. Initial payment $78/tonne port or $25 ish back at the elevator. fpc top up CWRS based feed wheat $166.41/tonne assuming you signed yesterday (difference Oct. 12 FPC and initial 1 CWRS 13.5 - paid in 10 business days) minus a further $13.28 feed adjustment or $178/tonne in your pocket ($4.75/bu if this is easier).

Why not just put $4.75/bu bid in the country and by pass the crap?

[charliep]

Actually $4.85/bu. Math challenged. Close enough to $5/bu to make it happen with some trucking premiums, etc.

[Steve_Winkler]

I believe your figures are correct Charlie, at least
for my area near Indus. Thus my eagerness to
sell some or all of my feed wheat for that price. I
have received $4.75/bu. for #1 before!!
On the phone each day to see if I can squeeze
some into the elevators, maybe late this week,
but not much volume, my locals are stuffed too.
I am also one who does not like that type of
open ended pricing.

[TOM4CWB]

Charlie,

This is but a symptom of the CWB mentality.

Like 2008 when the CWB got squeezed and was short millions of tonnes... and M-Wheat shot up to $25/bu. The commercials laughed all the way to the bank... while western Canadian farmers lost $$$hundreds of millions on the CWB positions that got cornered.

How stupid does the CWB think we are?

How is this any different?

With May 11 corn at $5.85/bu the feed wheat sales for 62lb frosted wheat should net us at least $5.50/bu. But the CWB is in charge... just like they were in Jan-Mar/08. Same folks... same problem... I will be surprised if not the same result. $$$100's of millions left on the table; a totally distorted market for grain... and western Canada cut out of the market AGAIN.

When were the last major feed barley sales made? When the CWB had to compete and sell in a dual market.

Then the CDN COurts... at the request of the CWB... ended our market opportunity.

The CWB monopoly law is here to protect everyone BUT grain farmers!

Pro-bono cheap grain reserves on call for the CDN livestock/millers/consumers.