CWB BUY BACKS

[vvalk]

Let's remember that this is a new company of
sorts and not hold grain to Aug 1 based on "I'm
never selling to the CWB, ever" . If we can get the
PRO up to new crop pricing or close to it,why hold
the grain. This way we move the grain out and not
push down prices on new crop by having too
much grain available.

[Braveheart]

I'll start in reverse order. Silverback, I don't believe I or anyone else should be entitled to your extra pennies or dollars. What's mine is mine, yours is yours. Yes the board has been less than honest about committment in the past. Can Ian White and the new directors make a difference? I'm willing to give them a chance.

Tom, I love competition. You know how much. You are definately right about basis. We were about a buck/bushel weaker on new crop wheat last I checked. But how long would there be a strong basis in the nortern tier of ND and MT if there was a flood of Canadian wheat into those elevators?

Bucket, there is no disputing that durum is a mess. But NO COST buyback is not the answer. A LOW COST buyback might be workable, but my understanding of durum leads me to wonder if even that would work.

I was lead to believe that with durum, the CWB always purposely rationed the amount that could or would go into the US. This kept the price strong and provided a price point for the board to price durum into North Africa and Europe. Opening the gates wide open to the US will ultimately lower durum prices if that is indeed the case. In fact if this has been the case maybe durum acres will have to shrink to keep demand and supply more price friendly.

The reason I suggest a low cost vs no cost buyback is there was no anouncement that that may be the case. It (no cost buyback) still presents a moral hazard to the stability of the industry and the farmers that never expected such a thing and contracted to the single desk.

[Hopperbin]

Letting farmers out of the A series to prop up their pool was a decision by the old CWB am I correct? Bucket my take is that it is not the proper way to do things. The pool was a deal entered into when the farmers signed up their grains.

[blackpowder]

If you chose to hold all '11 production until '12, you made a commitment to your principles not a business decision.
Buybacks for '11 crop are likely not coming, nor should they!

[silverback]

Does anyone know the last time the cwb only offered a contract for the people signing up in the first 3 months? of the crop year?

(I am not only old, but lazy too)

[oneoff]

It is mere speculation to claim that the CWB rations sales to the US to keep prices up. It is also utter BSclaim that there would be a "flood" of grain to the US if farmers were not forced to pay exhorbitant buyback fees. If that were true then the US prices are obviously higher than the CWB receives; and surely there has been enough propaganda to prove to every farmer that the CWB receives premium prices.
Nope; its like a CWB employee back in 2008 told me that sales were made by asking for 50 cents more than what the last sale was made. I seriously doubt that anyone realized that during the few times prices of grain are exploding; that it leaves dollars on the table when buyers snatch up as much scare available supply for a few pennies more than the last sale.
If anything, the CWB has probably operated on the basic assumption that "giving" away grain in great demand will pay off forever with customers that will only deal with the CWB in the future.
And that is why the poorest possible result of marketing a fraction of YOUR grain, in equal portions throughout the year would produce at least as great a return as the CWB ever has produced.
The only reason the CWB exists is because this organization has used its single desk powers to preseve its monopoly (seed grower, "organic" production and domestic feed sales excepted; but only in the designated area).
And lets wait for Jan. 18 and following for possible further suprizes.

[Braveheart]

It was not my speculation on how the CWB handled/handles durum. It was a former employee from the durum sales desk that shared the policy. Makes sense to me.

But, if there were no cost buybacks and there is a lot of durum on Can farms, it wouldn't take long for the trade to start picking it up and sending it south. They wouldn't send it to country elevators though, the end user certs would be too onerous. They would more likely put trains down there. Would it be a flood? Well, with the amount not picked up by the board, maybe a swollen stream but I think it could affect prices.

[Kodiak]

If a no cost buyback were to be attached to the grain and transferrable with ownership of the grain, I do not think it would affect nothern tier prices at all. Canadian based Grain companies would buy the grain and market it as they do any other commodity. Why wouldn't prices between the US and Canada equalize instantly, with the grain then finding its way to the highest net back end use location? I agree with Bill, we could have a temporary glut of wheat on the market come August 1 if we fail to transition smoothly. Whether I have an A contract or not, it should matter little. Each of us had the same opportunity to sign an A contract or not. We all had the same information.

[mbratrud]

This really pisses me off, that guys are stupid enough to have held Wheat and Durum waiting for Aug 1 and expect a good outcome knowing what we knew about the markets 3 months ago. Saying this as a free marketer, you boys have a lot of learning to do if you are not going to get burned in this environment. Lesson #1 you are responsible for your desicisons and nobody is going to fix them for you. Play by the rules!

[TOM4CWB]

Normally for commercial wheat growers... a valid call on a valid CWB quota (A Series for instance) is required to do a 'buyback' at cost or no-cost. Seed is different... and CWB policy has different rules for organic grain... so far.

I don't see this as any problem... because the new CWB can throttle back sales if there is a problem.

If there is no problem... why not?