December PRO - Pay Attention!

[charliep]

Note the December PROis out. The spreads (read premium) for high quality/protein CWRS has widened again.

[URL="http://www.cwb.ca/dom/db/contracts/pool_return/pro.nsf/WebPRPub/2010_20101216.html?OpenDocument&CropYr=2010-11"]December PRO[/URL]

The incentive remains to deliver mid quality ASAP and apply against outstanding fpc contracts. Likely will mean about $500 again on a "B" train.

[charliep]

I note the malt barley PRO is actually down a $1/tonne. I note the Alberta PRO is $191/tonne (before other incentives) versus domestic feed barley in the $150 to $190/tonne range.

My old and on going question. Is anyone offering any cash plus contracts (old or new crop)? In the case of barley, why does the CWB even bother to put out a PRO? Just put a price out daily.

[charliep]

Checked out the producer payment options. Note the 80 % EPO on wheat is about .01 cents/bu. Durum 3 cents/bu. Malt barley 7 cents.

First comment. There isn't anyone here who should not be taking the 80 % EPO. If you don't, I have to admit to being very jealous. You have way more money than brains.

When the cost of managing risk to the 80 % PRO level is this cheap, why go through the hassle of asking the federal government for an adjustment payment/the 6 week dance through the system. The board of directors should instruct the operations side to increase payments/accept the risk on the CWB side versus taxpayer and instruct operations to manage the risk to make it happen.

[charliep]

wheat epo (80 %) is 1 cent/bu.

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

[charliep]

Some have asked about the pricing pace over time. From the CWB website as of today.

December 2010-11 PRO and the price pace

The PRO is the forecast of the final pool return. It includes the estimated value of grain that has already been priced as well as the forecasted value of grain that has yet to be priced. The CWB prices wheat on a pace that is approved annually by the board of directors. The futures and options markets are used to moderate faster or slower cash sales to ensure pricing follows this pace. At the time of this PRO, the CWB has priced approximately 45 per cent of the expected 2010-11 crop year deliveries of wheat. A pricing level of 60 per cent is anticipated by the end of January.

[URL="http://www.cwb.ca/public/en/farmers/producer/pace/calculator.jsp"]pricing pace[/URL]

[TOM4CWB]

Charlie,

You asked:

" In the case of barley, why does the CWB even bother to put out a PRO?"

Guess what! 100 percent of CWB sales are through the pool accounts. STOP. PPO contracts are sold to the pool.

Therefore the pool must exist even if no grain is delivered to that pool... because 100 percent of the grain bought must go through a pool.

Hope that answers your question!

[charliep]

Might highlight that the CWB has cash traded feed barley (including this year). These transactions were carried out completed separated from the pools with profits used to prop up the PPO contingency (not sure what will happen with profits from the 2010/11 crop year).

[boarderbloke]

charlie, regarding CWRS, would I not be further ahead taking a FPC than taking 80% EPO? I'm selling #2 14.5 - 15.5%, my local elevator says that works out to about a nickel less than #1 13.5%.(around $7.20/bus)

[charliep]

I would go for a fixed price contract as well. Comments are for those who use the pooling system.

[jdepape]

Tom - Charlie's right - cash trades do not go through the pool. Especially the barley the CWB buys from the trade.

And Charlie, I agree - the CWB shouldn't even come out with a PRO.

I don't like the PRO - never have. It's only use is to manipulate price signals, particularly on feed barley.

Last year's pool B was completely devoid of any deliveries. What was the PRO for?

[SASKFARMER3]

Question we have two bags of feed or #4 hrs they are weighing great just frost damage. The rest is a 3 14.5 protein. Trying to blend all as a 3 but having tough time viagra wants to do deal with a 35 dollar a ton discount on two bags that's a dollar a bushel but your in the 3 pool yea just what I wanted.
Any help!!!
Still shopping around!