Sepember CWB PRO (old and new crop) Released

[charliep]

CWB PRO is out today (Sept. 24).

DATE: September 24, 2009
Grain Values Decline in Latest CWB PRO for 2009-10
Winnipeg -- The CWB today released its latest Pool Return Outlook (PRO) for the 2009-10 crop year. The change to wheat PROs from August ranged from down $13 per tonne to up $3 per tonne, depending on grade and protein level. Milling durum PROs declined $25 per tonne. Malting barley is down $12 per tonne compared to August, while the Pool A feed barley PRO dropped by $9 per tonne.

<a href="http://www.cwb.ca/dom/db/contracts/pool_return/pro.nsf/WebPRPub/2009_20090924.html?OpenDocument&CropYr=2009-10">September New Crop PRO </a>

PAY ATTENTION TO WHAT GRADES YOU DELIVER ON YOUR FIXED PRICE CONTRACTS (IMPLICATION OF HAVING FPC SPREADS BASED ON INITIAL PAYMENTS). Examples - 1CWRS 14.5. Initial payment spread - $11.30/tonne with 1CWRS 13.5 (locked in on an fpc). Current PRO spread 14.5 versus 13.5 - $18. Deliver high protein into the pooling system.

2CWRS 11.5 spread with 1CWRS 13.5 - $23.05. PRO spread between these grades
- $33/tonne. Deliver lower grades/proteins against fpc.

Difference between delivering 2CWRS 11.5 on an fpc (good decision) versus 1CWRS 14.5 (bad decision) would be about $675 on B train (based on today's PRO).

Watch the FPC basis ($20 over on the Dec CWRS) and EPO today. No EPO alternative durum - too risky I guess.

[charliep]

Should be fixed payment options (not fixed price). A freudian slip.

[charliep]

If you have 3CWRS low protein, the difference is closer to $14/tonne. May be worth warming your pen up to do more of this (realizing you have to be happy with $4/bu 3CWRS price).

If I haven't said it in the past, I hate the fact the CWB uses initial payment spreads for FPC pricing. The thing that makes things bad is that initial payments are relatively high versus the PRO so no adjustment payments anytime soon. What you see is what you get.