Supply of CWB grain to Domestic Consumers

[TOM4CWB]

Boone/Charlie;

I have an interested party who would like to strike a long term contract on a supply of various CWB grains.

THis party does not want to deal with the CWB... AT ALL.

They want the supply of grain to be "free and clear" of CWB pricing/buy-backs etc.

How exactly could I create a contract like this?

If I am contracting flax, with this party, for example... I could tell them I would deliver X tonnes of Z quality each month, at a price of Y, from Oct 04 through Oct 08.

On CWB grains, I have absolutely no way of ever estimating or contracting a specified value/grade of wheat or barley to offer to this party... as the CWB determines the price which I must pay the pooling accounts... or (Charlie says)PPO's.(I am not sure about PPO's being avaliable buy backs).. IMHO it is impossible to even determine a break even cost of doing business Just with the CWB side of this transaction.

I can create a value that I feel is fair for my Wheat/Bly production from Oct 04 to Oct 08, but how on earth do I project CWB costs on this project?

How can I get through all this "fog" and get this business done?

[Incognito]

Tom...careful, you might become a broker and buy a MANSION if you are not carefull.

LOL....

[boone]

incognito: how is it going ace, long day. Be sure to read the rest of the story you ex trade floor boys sure got thin skins. You want to talk about history repeating itself, this little vignette has played a couple times.

[Incognito]

thinner when i've been up for 20 hours...

[TOM4CWB]

Boone;

I seriously doubt THe CWB shipped one pound of feed wheat out of Canada in the last crop year... yet farmers were paid $80/t(approx.) for a product that returned over double that much.

If I want to mill/process feed wheat (into a human consumption product), I must pay the CWB pool accounts (CWB Domestic Buy-back)or PPO basis... over $100/t - $150/t the Last crop year.

How exactly is this fair?

[sshiels]

Not exactly the same, but I've been working on a deal to move some unregistered HRS, feed wheat here in SK, to the States. The PRO on feed wheat is about $133, the CWB buyback on this same feed wheat yesterday was $179. They are taking the possibility of a profitable deal to the farmer and stomping all over it. If they want that much from the farmer, should they not be able to market it somewhere close to that price? What am I missing?

[parsley]

Your'e missing this:

You're dealing with marketing-expert weasels with their heads up their adam's apples.

Parsley

[boone]

Tom4cwb: Your right and it isn't fair, and I've got a thought. If we truly had a price discovery that didn't include having any house bidders just blind sales, no company traders in any pits. Black box bids and every contract had to represent an export trade. Or milling purchase. Adjust for final quality of milling wheat. Feed wheat would be separate contract. So instead of buying back from CWB you are buying from this arms length market. With threat of physical delivery always and the reverse as well. CWB would buy from same exchange, everything done at cost of transaction. Blind brokers no mutual ownership, fee for service. Forced balancing of contracts and enforcement by financial penalty.