Do you want to know a secret?

[checking]

Secrets to farming success - starting out, grow a wide variety of grains to build inventory, as at least one a season will provide an excellent return - invest in lots of grain storage, as you're going to have to have patience to wait for grains that can't be moved except at a loss, their season of scarcity will come - grow what you don't have in storage to replace what you sell - invest in lots of fuel storage tanks, fill them in this oil price environment - have a 1A licence, a super B, and an inexpensive reliable highway tractor to deliver your own grain when opportunity knocks -and never contract what you do not have in storage. Think it can't be done on your farm, think again. It can be done, and it works.

[charliep]

To help agstar and wilagro with their explanation of the CWB discretionary trading, it does relate to the CWB sales pace relative to the assumed one (Wheat Pool Pricing Model as explained on page 45).

To keep on topic, the best way to turn a good price into a less good price is to trade futures and options from the speculation side - likely to loss money. Perhaps the best marketing strategy is to sell at regular intervals during the year for good prices and simply deposit the money in the bank.

[Zaphod]

When prices are great, they won't stay that way. When they're horrible, they won't stay there either. Markets eventually converge back to the long-term average.

[mbratrud]

pilpilsner - OK

[classicalliberal]

Wilagro, I wish you luck in farm marketing if you are not interested in using the tools available to help manage price risk and lock in profits. If you hold your grain in bins waiting for a better price you will likely have to sell at a low price and sometimes a high price. I have no sympathy for people who don't know how to use the tools available and who end us selling in low priced markets.

In terms of making money off farmers, I have said this many times: why is it bad to make money from farmers? No futures traders have ever taken money from farmers, in fact you should be thanking the index and hedge funds who blew the markets out of proportion for the last two or three years. They were the ones buying $16 canola, $7 corn, $15 soybeans and $15 wheat.

Pray that the funds return for your sake.

[classicalliberal]

There isn't such thing as hedging loss, certainly not to the tune of 100 million or whatever the CWB lost. The only way you can lose money "hedging" is being a grain merchant by buying grain at a high basis and reselling it at a low basis. That would constitute a "hedging loss."

If the CWB had shorts in the wheat market, they should have been able to sell the cash wheat higher and thus offset their 100 million futures losses. The only thing that I can think they did is speculate that the prices were going down.

[classicalliberal]

Tom you are right, I noticed that as the market went higher the CWB basis got cheaper but when you went online in the US elevators, their basis for hard red spring wheat was $4/bu above the minneapolis price while ours was $2.5 under the minneapolis price.

I guess it must be the transfering of wealth from one group to the other, very typical in many aspects of this country (yes I know it could be worse by living in most other countries).

[TOM4CWB]

Classy;

"The only thing that I can think they did is speculate that the prices were going down."

Guess who bought high... and then held Long positions held while the market tanked. That is a kind of a hedge loss... and only they could afford... with our money backing them... to throw $$$100's of $Millions away.

[TOM4CWB]

Classy,

Why do you think they said... "In an adverse market,
the nearby price offered is higher than can be achieved
by hedging forward in the futures market."

sURE LOOKS, SMELLS, AND SOUNDS LIKE A LONG POSITION TO ME! tHAT IS HOW THEY EXTEND SELLING THE POOL... AFTER THE MAIN BODY OF 07-08 GRAIN WAS SOLD BY THE END OF JAN 08.

[Fransisco]

pilpilsner said," In the most volatile marketing year ever,would you not expect hedging losses?"

No, I would not. If there are losses then you're not hedging.