Old Crop Wheat Roll

**melvill** · May 25, 2006, 15:59

Yes, you can deliver contracted old-crop wheat when the grain is called and price it into the '06-07 pool.

You cannot, however, deliver contracted old-crop wheat and use that as a delivery against the '06-07 fixed price or basis contracts.

**Ron** · May 25, 2006, 18:36

But you can underdeliver 10% of your contracted 05 production and price it with a fpc into the 06 year?

**charliep** · May 25, 2006, 19:29

Another alternative would be to sign a daily pricing contract realizing you can use as a forward pricing tool but rather only a delivery contract. To hedge, you would have to sell US wheat futures - market would depend on type of grain. You would would be at risk for currency change and basis.

**charliep** · May 25, 2006, 19:30

One more try - shouldn't be doing this with the hockey game on.

Another alternative would be to sign a daily pricing contract realizing you CANNOT use as a forward pricing tool but rather only a delivery contract.

**melvill** · May 26, 2006, 09:27

Oh, Charlie, the mis-type in your post must have been because you couldn't see the keyboard through those Oilers tears! I'm with you on that! Grin.

**TOM4CWB** · May 27, 2006, 10:06

Lee and Charlie,

Isn't the fact that we can price 05 and deliver 05-06 grain into the 06-07 pool...

Proof that the CWB system discriminates against farmers who need cash flow and risk management tools?

**charliep** · May 27, 2006, 17:21

Lee - I got over the tragic event of a team further south ended their hockey season and began playing golf.

Tom4cwb - Will leave the political issues alone on this thread. Within the current system, not much you can do old crop to capture the current rally unless you signed a basis contract or a daily pricing contract which is still not used.

What all this does highlight (in the current system) is the need to plan your marketings for the 2006/07 crop year. The CWB deadlines mean early decisions.

**TOM4CWB** · May 28, 2006, 15:22

Charlie,

Not sure why an issue... like grain growers needing access to the world market... 365 days a year... is a political issue!

What function does the CWB restricting cash forward sales serve?

THe only practical answer can be to prevent growers from maximising their returns through a well functioning cash market.

In turn this makes pooling look like a reasonable alternative... which it is when compared to CWB marketing options that lock a price in.

This amazingly... has absolutely nothing to do with the maximisation of returns using a single desk. Instead it has to do with Conveinence, Control, and Competition...

Like the Ausies have discovered...

Transparency of information leads to legal and moral complications for any monopoly.

Could this be why we don't have a daily CWB price avaliable 52 weeks a year for any grower with uncommitted unpriced grain?

Old Crop Wheat Roll