Rumour

[Zaphod]

Are the MGE limits going to expand just in time for the market to tip over?

[Zaphod]

It's interesting that if the CWB is a major short in this market, they may not be able to deliver to get out of their position. Apparently, the MGE contract specs state that the party taking delivery has the right to request a certificate of US origin for the wheat. So the threat of delivery isn't much of a threat in the case of Cdn wheat. And with the market doing what it is, the spec longs aren't highly motivated to accept delivery.

[parsley]

"MGE contract specs state that the party taking delivery has the right to request a certificate of US origin for the wheat"

Extremely interesting observation Zaph. Do you suppose the CWB even read the fine print?

I don't think they knew about FOREX until chaffmeister posted it.

Parsley

[Zaphod]

They may have read it but probably didn't think it would ever cause a problem. But if the wheat bins in North Dakota really are empty, who else can possibly threaten to deliver except the CWB? And why would the longs want to get out? This thing could keep going on forever unless the regulators decide to step in and call for positions. That's what collapsed the canola market back in 1994. Just a heads up.

[AdamSmith]

Does this not explain why the the cash bids are way out ahead of the futures?

The longs know the short is not in a position to deliver, but they are trying to force delivery from a player who they know doesn't have wheat in position for delivery and that the only possible way for the short to aquire physical delivery wheat is for them to buy it from the cash market and they also know that the only place this short can buy U.S. origin wheat is from an export terminal like Portland and that's why Potland is $1.75 or more above Minny.

Fish in a barrel for the longs,

standing on a chair and throwing a noose over a beam and contemplating the next move for the short.

If it is the cwb,

couldn't happen to better bunch of guys.

Waterloo!, Waterloo!

[Zaphod]

The only thing that will save the CWB is that they are long cash wheat between the PPOs and their stranglehold on the export market. Their big problem is that they can't sell the cash and buy back their hedges with the market locked limit up every day.

[parsley]

The Directors will be puking panic.

A relatively unknown condition.

annorexia Boardosa


Doctor Farmer is needed.

A Ministerial Order commanding the farmer to deliver grain to the CWB would stop the puking.


"Deliver or be jailed"

Not unimaginable, is it?

Parsley