Early Payment Option Premiums the Day after a PRO

[charliep]

I always like to look at early payment option premiums the day before and the day after a PRO.

Will just highlight for CWRS (note port payments).

A 90 % EPO off the Sept. PRO that provides a floor payment of $270/tonne costs $8.16/tonne. A 100 % EPO off the August PRO that provided a floor price of $278/tonne did cost $19.11.

An 80 % EPO off the Sept. PRO that provides a floor payment of $240/tonne costs $6.53/tonne. A 90 % EPO off the August PRO that provides a floor payment of $250.20 costs $9.50/tonne. Perhaps more interesting is an 80 % EPO off the August that provides a floor payment of $222.40/tonne cost $4.06.

May as well go yell in the wind but why does the CWB carry the stupidity of offering EPO off the PRO? Why not a program that offs EPO values off the daily offered fixed price contracts and a premium that reflects the cost of managing risk that day?

[URL="http://www.cwb.ca/db/contracts/ppo/ppo_prices.nsf/epo/2010_index.html"]EPO[/URL]

[furrowtickler]

Just to completly maximize confusion amounst farmers, and make it as complex as possible so most farmers and analysts like youself go nuts trying to figure it all out. Thanks for trying though charlie, I know I gave up a while ago, not worth my time or effort. Personaly I think it is all a gong show.

[charliep]

I understand.

Just would like to see a price that you could say yes or no to (either response is fine) and some pricing/payment alternatives that can be fit into a marketing based on a farm families financial and risk management needs.

Note the conversation on canola. At least you can shop the market among multiple buyers and at the end of day store knowing the market will offer you a new set of opportunities tomorrow, in a week, in a month, in six months. You can review and pick the best one for your situation.

[furrowtickler]

Absolutly right charllie.

[carebear300]

Well said Charlie!!! I am promising myself to never again grow ccrops that are marketed through the wheat board. Enough is enough.

[Francksaskfarmer]

I have asked many times on focus groups, at combine to customer courses or to my rep for an easy way to figure out what the value of my grain can be at any given time. For example, if I could go to the e-services, type in my grade, class, prot, and may be location and trucking prem, what would be my potential FPC or EPO or my initial payment potential leftover interim and final payment.
That would make things so much easier for decision making Cash Flow.
I also think there should be a line showing potential amount owed from the CWB in interim and final payment according to deliveries in the current year, of course it would be subject to change. Show a big red disclaimer that says can change any minute.
Every time I was told that it was coming very quick but it has now been 3 years and many different times and it feels like I am talking into the wind.
As of today I have to figure out the spread in quality value and go to 2-3 different web pages to come close to a calculation of the value of my grain.
At times like others I have just plain given up.
Why make it simple when it can be complicated!!!

[bucket]

How about showing their asking prices daily so a farmer can see the spread between the initial and the port asking price.

Right now its close to 6.50 a bushel between net initial and asking price port.