Because of the storage cost issue, I suspect most farmers will plan on taking the initial payment/delivering to the 2006/07 pool during the first two weeks of August. You can use the DPC later on but the spreads you use will be on the day you sold into the new crop pool. Spread risk is an issue with the ultimate out the ability to leave 2005 in the new crop pool and use the DPC to price 2006 crop (as you indicated WRAPper).
I have concerns over the next 90 days that movement (as per usual) will shut down ahead of harvest. Everyone (CWB, grain companies, farmers) will have pictures of higher prices and blending opportunities to upgrade 3CWRS wheat to something better. My hope is there is an grain idustry commitment to pricing and moving this wheat during August and September into the current rally. A rally is only theory until a farmer has deposited the cheque for a grain sale into the bank. The lessons learned from 2002 crop year (crop year high prices in the fall and deficits in the pricing pools) should not be forgotten (realizing there are differences between the current crop year and 2002).
Have tried to get conversations going a couple of times but I think one of the most interesting changes the CWB has made is the move to guranteed delivery contracts. The CWB has committed to taking product within a certain time period. You as a farmer are guaranteeing to provide product to the CWB. I think this is a critical change that needs to be made versus everyone sitting around until new crop is harvested and go through the lottery of what gets called forward first. This is a necessity to making the current CWB pricing contracts better.
I have concerns over the next 90 days that movement (as per usual) will shut down ahead of harvest. Everyone (CWB, grain companies, farmers) will have pictures of higher prices and blending opportunities to upgrade 3CWRS wheat to something better. My hope is there is an grain idustry commitment to pricing and moving this wheat during August and September into the current rally. A rally is only theory until a farmer has deposited the cheque for a grain sale into the bank. The lessons learned from 2002 crop year (crop year high prices in the fall and deficits in the pricing pools) should not be forgotten (realizing there are differences between the current crop year and 2002).
Have tried to get conversations going a couple of times but I think one of the most interesting changes the CWB has made is the move to guranteed delivery contracts. The CWB has committed to taking product within a certain time period. You as a farmer are guaranteeing to provide product to the CWB. I think this is a critical change that needs to be made versus everyone sitting around until new crop is harvested and go through the lottery of what gets called forward first. This is a necessity to making the current CWB pricing contracts better.
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