CWB BUY BACKS

[bduke]

I have been thinking about the "choice" wheat, durum and barley in storage.

I have no idea how many tonnes are waiting for August 01,2012, but I think
the volumes could be far greater than the CWB votes would indicate.

In other words, I expect the tonnage of choice cereals is a better indicator of stakeholder
preference than the CWB balloting.

If our handling and transportation system is overloaded this coming August,
the basis discounts will be far greater than normal.

This could negate the benefits of choice this fall, which is hopefully not intended.

If the Minister and/or CWB board of directors were to demand no cost buy backs for
designated area CWB cereals, the inventories waiting for Aug 01 could be reduced or
eliminated.

Market opportunities this winter and spring may be more favorable than this coming fall.

We have many dynamics at play in this world... some not favorable.

If the Eurozone debt snowball starts rolling out of control I think grain markets will be
negatively affected.

Also,the Eurozone debt mess is driving fund money into $US, which is negative for grain
prices. Corn mostly drives grain pricing, and the US is where most pricing is discovered.

If the World has better crops this calendar year our prices will likely be under pressure.

If only Canada and the US have better crops, our Canadian transportation and handling
system will be a bottleneck.

The CWB could immediately offer no cost buy backs in the CWB area, as it does, and has been
doing, for the Rest of Canada.

I also think the CWB could participate in this marketing, and start the process of being a
participant in a competitive purchasing environment.

Perhaps the CWB could offer limited tonnages, cash prices, delivered to Inland Terminal,
Ports, Grain Cos or US Mills or Feedlots.

They could broker handling arrangements, freight, Fobbed at farm, or end user CIF.

Prices would be netted back to farmers less costs, if they are competitive they should
do business.

The Graincos could also start guaranteeing contracts... for current inventories... and by
Aug 01, our system will be more normalized. Current new crop contracts are caveated.

I invite all comments and critiques to these thoughts. I could be wrong.

Cheers... Bill

[BreadWinner]

While at the wcwga meeting in Moose Jaw this week Ritz was asked this same question a few times. The first answer was "no" the next was that they would look into it. I think they will have to do something to curb the flow that will hit the elevators in august. I think the New CWB will have some type of program to address this grain but it better be good or it wont work.

[oneoff]

I assume that the CWB is operating under a slightly or much different style than when the farmer directors had control of the organization.

It concerns me to think that the new management has not shown any more tendency to allowing no cost buybacks of uncontracted grain by those who wish to pursue their own marketing efforts.
I fail to see any short term marketing freedom; and the lack of creativity means more wasted time in the process of moving forward.
Maybe there is no intention of moving forward.

[BreadWinner]

I think it has allot to do with an injunction possibility in two weeks. I think the CWB would love to put their 8 little boys back in the board room. I sure hope the government lawyers due a better job in the courtroom this time.

[oneoff]

I assume that the CWB is operating under a slightly or much different style than when the farmer directors had control of the organization.

It concerns me to think that the new management has not shown any more tendency to allowing no cost buybacks of uncontracted grain by those who wish to pursue their own marketing efforts.
I fail to see any short term marketing freedom; and the lack of creativity means more wasted time in the process of moving forward.
Maybe there is no intention of moving forward.

[Braveheart]

Bill, the moral hazard with what you're suggesting is that it wasn't announced or suggested before marketing or contracting for this year's crop began. Those of us who contracted the A series as offered would or could be at a disadvantage because of an in season rule change. I don't consider that fair or prudent.

We all knew going in that Aug. 1 was the date for marketing freedom. We want this new system to be successfully adopted by as many farmers as possible. No cost buybacks at this time would alienate a huge segment of the farm population.

[bucket]

braveheart

The cwb is letting farmers out of their durum contracts for nothing, If farmers want to sell their durum they might as well have the freedom now when their are still prices farmers want.

If the cwb is too stupid to keep the grain on contract or roll the contract to keep the grain volume for negotiating, then there is no sense in waitin for august 1.

[TOM4CWB]

Braveheart,

ON the other hand...

If the safety valve of competition were given just a small opening... ALLL of us could benefit.

The basis at this point still is way out of line. A little competition would and SHOULD bring this into focus... and everyone would benefit... our customers receive their grain on time... at a fair price... growers as well being treated with respect and fairly that did contract with the CWB.

The main point on marketing freedom is that August 1 2012 we have 'Marketing Freedom' which means selling to everyone ... the issuance of 'No Cost export licenses to growers is NOT marketing freedom... just a very small measure of CWB respect for those that have been abused since 1990!

[silverback]

The kids and a lot of our neighbors stopped believing what the cwb was saying many years ago. So when they said there would only be an A series you can guess where they filed that info.

We made that choice to gamble.

I would really hope that those that signed up their grain on the A series don't now expect that a few pennies gained by a few neighbors from a no cost export licence, (to get rid of last years crop,) should be given to them also.

They never let us out of our high quality hrs wheat contracts in the past, are they going to allow that now?

They have six months left before Aug 1, what are they telling our current and past wheat customers? Go find someone else? Come back in August?

(If I sound cranky, I am. This is getting more and more ridiculous if that is even possible)

[bucket]

silverback

The cwb has a small to non existent fee to get out of A series contracts.

My thinking is they have to let farmers out to protect the pool. Its obvious they ****ed something up when the are 100% accepted and 75% called by mid year and no interims on the horizon. And they just went through a good price rally from may to October.

What's your take on it?

[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)