PPO Basis

[crusher]

Take a look at the basis over the last few months. Farmers are taking quite the haircut. How many more sleeps until its not my concern? On my little contract I've taken a $3,000 hit and we're only a month into new crop. What did they sell a bunch of #1, 13.5 for $200 FOB port? Any board supporters want to drop by my farm farm so I can punch you between the ears to wake you up.

[furrowtickler]

Your absolutely right, and to boot they will deffend that frickin borg to there death,most are almost or already there. Yep, doin us the world of good,for us that don't know any better. All the while the actual price if wheat is goin up everywhere else on the planet - and the PRO's drop - thanks f-heads. But hey we "must save the CWB" and pay severances and lost contracts.
Agstar - burbot, who ever, show me the benifit to this circus....

[farmaholic]

I assume all we are asking for is to make our own marketing mistakes. I remember a couple of years ago when producers in my area priced fall canola for a little over 8 dollars then later that winter could of had about 10 dollars. Oh well at least it was their decision and that I can't argue with. I would think the Board is no different and has made advance sales at poorer values than we see today.

[furrowtickler]

Yes but we are dumb farmers who can not think for ourselves and must have the great marketing powers of the CWB to extract a premium for our wht/barley. Show me the premium - ever!

[poorboy]

Are you talking about the basis on the BPC and FPC?

If so, it took me a long time to understand how that basis works. It is not like canola at all.

The basis on the FPC is a made up number from the CWB that relates the current futures price to the pricing of the pool account at that particular time. So if basis is poor, it means that the current Futures price is higher than the pool account. If the basis is very good it means that the current pool price is better than the futures.

If you do a FPC where you are locking futures and basis, then you essentially locking in the price that the pool account is at for that particular time. Remember the pool account may go up or down from that point on.

It has been my experience that you always want to lock in your basis separate from the futures. If futures are rallying then lock in the futures only. Once the pool accounts make more sales and increase in value, then the basis will narrow and you lock in the basis then, or when futures crash, usually basis improves.

Clear as mud?

[Hopperbin]

What is clear is the cwb is providing us options to screw ourselves. Not exactly on our side. Why should our basis be adjusted down because of poor cwb previous pool account sales, not right.