New CWB Feed Wheat Program

[TOM4CWB]

Charlie,

It is virtually impossible for the price of the feed wheat PRO to ever get to 150 percent... 200... with 40 percent of the pool priced?

The CWB must think we have noodles for brains.

I agree... cash the cheque.

It is a crime the CWB had not done this contract 2 months ago.... or at least before the 'A' series contracts closed Oct 31.

Almost every election now... the CWB dreams up a special treat... my guess is this is the 2010 brain child... along with extending the PPO cash prices till Feb.

Talk about "thinking out side the box"!

A 200 percent Early Payment Option.

WOW... and to think I might be the first to sign up... AGAIN!!!

[Steve_Winkler]

Well it's about time.... idiots. Too bad there is no detail on the pricing discounts for the new EPO levels that I can find at least. I only see the old levels 100,90, 80%. Are these buried somewhere else on the website. I have a call into my FBR, I can imagine he is swamped with calls regarding this.

[Steve_Winkler]

OOOPS. I just followe Charlie's link.

Found pricing. Holy Discount Batman.

[charliep]

It is one complicated program if you want to move beyond just the price/money you deposit in the bank (or at least within a couple of weeks of delivery). Perhaps a time you just look at the value and make a decision whether worthwhile. Don't wory about where the CWB came up with the number.

Not sure the rules around delivery and pricing - can you lock in a price on a GDC that will be delivered over a two month window - i.e lock in a price at the signing of a GDC.

[JDGreen]

I must be the dumbest farmer around. I have been trying to make sense of this since last night and still no return call from my FBR. We are back to the same old crap, run around BS. Post a daily price with 100% acceptance and be done with it.

[charliep]

For what it is worth, feed wheat to South Korea business (early 2011 shipping period) could be transacted today at about $260 to $270 ish/tonne. Knock off $15 ish for handling Prince Rupert/Vancouver and you have a price close to $250 in store.

[Burbert]

WOWSERS WHAT A PROGRAM! This is everything that anyone could ask for, innovative, progressive, money making, and best of all, its legal, not a scheme. Comedian Marketeers and desenters, let the WHINNING, AND SNIVELING BEGIN, one, two, three, all together now, A COLLECTIVE SNIVEL, THEN WHIN, NOT GOOD ENOUGH, NOT GOOD ENOUGH!!!!!!!!!!!!! Response from Albertie Governor, the wheat board must be insane, yeah manically insane!!!!! After all, hindsight is perfect, the program could have been better than this.

[charliep]

Actually a lot better that what existed before. Just a question why not earlier.

Would ask you to explain as the CWB spokesperson how the program operates and the nuances of the fine print in the contract. But won't put you through that pain. You were obviously happy with the 70 cent/bu initial (now adjusted to just to $2/bu). Perhaps just jealous because I don't know too many farmers that can afford to do this cash flow wise. You are a lucky - either a millionare or other sources of income/a paid off farm.

[charliep]

Burbert

Help me understand something. Why didn't the CWB just go with a daily cash price connected to a guaranteed delivery contract? It would be posted on the elevator/inland terminal backwall with the open market crops?

[jdepape]

See if I can figure this out -

PRO is 232

100% EPO gives you guaranteed price of 215.90 plus any final payment above 232

It's like selling cash at 215.90 and buying a call option with a 232 strike (at the money).

200% EPO gives you guaranteed price of 237.44 plus any final payment above 464

It's like selling cash at 237.44 and buying a deep out of the money call option with a 464 strike

If the CWB is willing to guarantee a price (200% EPO) that is $5 over the PRO, I'm gonna guess that they believe quite strongly that the final pool return will be higher than the current PRO, perhaps substantially higher.

Unless you need to go with the higher guaranteed prices for cash flow, the lower EPOs (80%) seems like the better deal.

Am I missing something?