Hard Red Spring... Whats it worth?

[TOM4CWB]

Purely the difference between a push and pull sales system.

The CWB is set up to 'push' our wheat out. US growers are accused of wanting 'more' than world value... so the buyers must 'pull' the grain out of grain growers bins.

Kind of like what happens with organic wheat/grain sales in the 'designated area'

We have a system that is backwards... and it will not change until the principals the CWB sells on reverse.

Responsible/Transparent cash sales... create value by every sale being backed by a grower contract... or a responsible party as in the futures exchange that WILL pay... if called upon to fulfill the contract.

The CWB is a soft touch... and it makes no premium because when a push system dumps grain at the port... do not expect it is what the customer actually would pay a premium for!!!

Value for grain growers = Fair average quality grades.

The US marketing system works... because if quality is demanded... it is paid for... kernel by kernel.

[cityguy]

probably nit picking but the daily USDA reports for Great Falls 14's had a bid around $9.00, so there's something not quite right about the USWA value. USWA "basis" of $4.00 over at the PNW doesn't jive with daily milling wheat bids in the east which are about $1.80 over. That spread is too wide as the eastern versus western spreads should probably be more like 50 to 75 cents, not $2.20. One's too high, one's too low and would suspect that the $4.00 is more out of whack.

More to the point, the FlexPro at $9.66 at port less about $1.50 back to the country net's $8.16 versus Great Falls at $9.00.

Tom's right though - when the CWB is blindly given "pool" tonnes on October 31 with no clear price signal they are going to end up being price "pusher's".

Should almost have a system where only those that sign up basis contracts / flat price contracts with the CWB should be allowed to deliver off combine, and "pool" tonnes can only move after acceptance - say after January 1. There is no price discipline from the farmer to the CWB in the current system.

[bucket]

cityguy

As I understand the current basis price contracts (BPC) that you can take right now, you are taking the futures price then the basis is assigned by the cwb starting in feb 11.

They should call that a futures price contract.

You said "There is no price discipline from the farmer to the CWB in the current system."

Actually there is because the only grain the cwb has to sell is that signed up on PPOs. The pooled grain is not known until contracts are signed after september 1.

This is exactly what happened in the durum market. The cwb was selling grain they thought they had but farmers wouldn't commit the tonnes because of poor prices or they had sold it off board for more money. Then the cwb couldn't fill boats and had to go to GDCs. And the fact the cwb did not offer up incentives tells me they blew out the durum they did not have contracted from the farmers.

Who pays - farmers of course. And the cwb blames the farmers for not delivering when it was the cwb's fault for not watching off board prices that were higher than their PRO's. That in itself told farmers to sell in march - June 2010 their durum to the off board market.

Also keep in mind the cwb was selling durum they didn't have contracted to them, so the farmer does, at least in durum, tell the cwb what to do. But the cwb doesn't listen which in why there was a million dollar demurrage bill on one ship alone.

[TOM4CWB]

Bucket,

As it is now... the CWB OWNS every kernel of milling wheat and Export Feed that is grown in the 'designated area. STOP.

SO ppo contracts are not the only wheat being priced... only a Board of Directors decision on the selling pace to prevent 2011-12 CWB Sales; would stop CWB sales being made.