2011 cps wht question

[Muskeg4dirt]

If Cwb only offers/accepts A seris CPS in 10/11 what about the FPC for CPS for Dec 2011? We did do 20bu/ac futures only for dec 2011. Does CWB "have to" accept the grain even if no CPS contract for next year or can they change the rules when they want?

[charliep]

Good question and no answer. Not 100 % sure how the guaranteed delivery contracts will work after the closing of the "A" series. Have changed the rules around pricing as well over time.

Perhaps for the CWB has to look at making all producer payment options for alternative wheats guaranteed delivery contracts at the time of signing. If the CWB signs a contract with you, then they guarantee to accept it (provided you make the grade requirement in the contract) within a reasonable amount of time after harvest.

You are entering the director election period and this is a pretty good question for the candidates. They may not 100 % understand the mechanics but the candidates better have a view of how these programs will operate/some of the conpromises that will have to be made in the new world.

[charliep]

Perhaps a frustration is the alternative wheats (CPS,CWRW,CWES,SWS, CWWS) are all tied to the pool the same way they have always been for the last 50 years but the CWB handles delivery and price risk management differently in the new world. Result may be the CWB manages their risk (at least as they percieve it) but more risk gets handed to anyone who grows them.

They need to break these classes of wheat free from CWRS altogether and let them have their own pricing/pooling systems as well as delivery mechanisms. Your CWB candidates (if you are in an odd numbered district) need to be pushed on this.

I note the CWB has changed the way it handles SWS for the domestic milling market.

[charliep]

Should read more before I post. The CWB does offer a guaranteed delivery up to the contracted volume. Sounds like the CWB does effectively offer a GDC for new crop cps red. cps white sounds like a different story. You can read and maybe we both can sort what they (the CWB) are committing to.

[URL="http://www.cwb.ca/public/en/farmers/producer/1112bpc/pdf/dg_wheat.pdf"]new crop ppo contracts[/URL]

[charliep]

Actually have read this article over a couple of times and have to admit to being more confused. Always interesting when philisophical things like equality of market access take over common sense things like trying to make the link between a buyer who needs wheat in given period and a farmer who wants to sell for cash flow/bin space. 20 bu/acre will easily fit a contract call but still frustrating.

Sorry for the rant.

[TOM4CWB]

Charlie,

If read closely, the PPO sign up date is Key. For 100% acceptance the contract needs to be taken out before the acceptance date of the CWB 'A' series contract; for CPS red, October 31/11. Delivery should not be a problem, as long as they do an 'A' series delivery contract that matches the PPO tonnes locked in.

[charliep]

Still a little confused as to what can be delivered off
the combine. In the example, would be contracting
farmer be able to deliver the full amount they have
contracted under the PPO on the "A" series or would
they be restricted by the 60 % called on the "A"
series. Example - I contracted 1,000 tonnes on
October 15 prior to the "A" series final date. On
October 31, I sign the full 1,000 tonnes I have
contracted under the PPO (maybe I don't have to).
The acceptance level on the "A" series is 60 %.
Space in the elevator. Can I deliver 1,000 tonnes or
600 tonnes before the end of the calendar year?

[charliep]

Talked to the CWB and found.

Still have to sign a CWB contract series and still subject to contract calls. If your PPO commitments (read volume) is bigger than the actual amount taken through the contract series, you can get a special delivery privelege after the "C" series (provided the PPO contracts signed prior to October 31).

Example. You have 1,000 contracted under both the PPO prior to October 31. You tried to sign the full 1,000 tonnes on the "A", "B" and "C" series but the CWB only accepted 80 %. You can deliver the last 200 tonnes at the end of the crop year. Someone with no PPO (or a PPO signed after Oct. 31) would carry the 200 tonnes into the new crop year.

Only other thing is to make sure you contract the full PPO volume on the "A" series - particularly for CPS red, CWRW and SWS. GDC contract may be available but they may not either. Not sure how CWES and CPS white will work when only GDC contracts.

Hopefully some will review and correct me if I am wrong.