CWB lost $467M on Hedging Activity

[TOM4CWB]

Dear Charlie,

I see the CWB paid PPO growers $1.26B for our grain... (Pg.61) and sold it for $1.65B. We as growers paid any liquidation damages required IF we didn't fill our contracts...

SO how in the world did the CWB rack up losses of $467M?

Did you see the CWB sold organic cash wheat for $846/t!

Rod, Stuart, and the 'single desk' organic crew must be proud of the CWB... it can sell organics and basically break even... while PPO commercial suckers aren't allowed to cash price...

What a total farce.

[bgmb]

Humm tom I wonder

Would the hedging losses be from grain priced early by farmers through the FPC and hedged by the CWB before the price exploded.

[Hopperbin]

BGMD that does not make sense.
First of all the reciepts from the grain sold on PPOs totalled, 1.643 billion
The amount the farmer got was 1.258 billion. So that must mean when the farmer priced his PPO the CWB actually sold the grain for much more money 1.305 times more than what the farmer got paid.
The so called hedging activity amounts to more than 1/3 of what the farmer got paid on his contracts. That is actually technically impossible so some questions have to answered about what this hedging activity actually is. I think I know so I will say it now. It is a transfer of money to the CWB pooled account and nothing else. The CWB's explanation is bogus, crap,

Screw the CWB.

[Hopperbin]

Oh crap this just gets worse.

The 89 million deficit in the PPOs works out to 20 dollars per ton of PPO grain.

Oh Crap it just got worse again.

The 467 million they claim for hedging expense works out to 103 dollars per ton of PPO grain sold.

[Fransisco]

Can the board really be that bad at this? Yes it can.

[Hopperbin]

Oh crap this just got worse again.

So when I locked in my soft wheat for 5 dollars a bushel net to me on a PPO. They are claiming a hedging loss of 2.8 per bushel as they say all the hedging losses are due to wheat.

SO HOW IN THE HELL CAN THE PROS GO SO HIGH WHEN THERE IS SUCH LOSSES ON THE PPO,s? BUT THERE WAS NOT A LOSS PPO GRAIN ACTUALLY HAD AN INCOME OF 1.643 BILLION. 1.303 TIMES MORE THAN WHAT THE FARMER GOT PAID ON HIS CONTRACTS.
THE HEDGING EXPENSE IS CRAP PLAIN AND SIMPLE.

[TOM4CWB]

Hopperbin...

I am afraid that on the other thread Charlie highlighted what happened...

The CWB 'made' back the hedging losses... with basis gains.

Remember that the basis was up to $6/bu OVER the MGE futures... PNW growers... and even CDN organic growers cash traded this... as it was the case @ $846/t the CWB paid out to 'designated area' and actually got $845.50/t cash.

$100/t was nothing...in this market.

Remember the PPO growers/sellers were forced and in fact paid the outstanding futures difference... on anything they had contracted and did not deliver to the CWB in 07-08.

[Hopperbin]

I don't get it the basis is supposed to reflect to the producer the actual price.
But not really if anything on most contracts the producer was at a disadvantage the the actual price.
Yes the pricing damages are accounted for
they amounted to 7.864 million.

[Hopperbin]

Tom you are referring to American basis.
We in Canada never had that positive basis. So if the PNW had a positive 6 dollar basis why would the CWB have a negative 4 dollar basis? (hedging loss plus negative basis?)

[Hopperbin]

I got the pos and neg terms on the basis backwards I believe but you know what I mean.