CWB Enters into Handling Agreements with Cargill

[charliep]

When you look at capacity at port (Vancouver, Prince Rupert, Thunder Bay, Baie Comeau, versus potential grain handle at primary elevators in and Cargills connections/own flour mills in the US, there is likely a solid business reason why they were the first to sign a handling agreement. If I remember back to the days of the Daily Price Contract, Cargill was one of the main companies that booked supplies for this program prior to its getting overbooked. Not a comment on good or bad. Just an observation.

[charliep]

Will get beat on by both sides of this debate but I highlight the benefits of the CWB in the new.

1) Farmer support based on history and fit in their risk management programs. Lots of farmers still like pooling. May be the CWB will off better ways to manage grade and protein spread risk than grain company contracts. Ability to separate price (CWB) and delivery (grain company).

2) The CWB will offer services to grain such as reduced/no hedging costs/price risk (handle for elevation), inventory financing, ability to use deliveries to other grain companies to source crop for end use sales, ability to use CWB contacts in the export market, etc. Put another way, the grain companies may have solid business reasons to use the services of the CWB.

3) The potential development of price and volume information systems at primary elevator and port position. As an example, there will likely be an active cash market for wheat on the west coast (not every ship is going to arrive on time or every grain company have exactly the right wheat in store when a vessel arrives). There will mean cash trade. The question is how available this information will be and from there how it will be reported.

Not all will be bad in the new world.

[bucket]

charliep

Does that mean you see a day when they use basis and premiums to get the grain they need at the right time and place?

If so doesn't that mean a more efficient sytem that doesn't tie up elevator space with off grade grain for months?

I remember seeing a pioneer elevator with snowstar wheat tying up a couple of bins for 9 months.They were pissed but the hutterites that delivered there were happy.

[Burbert]

The other multis, may be left whinning and
sniveling in the wake of this historic
deal. They'll haveta marketeer/chisel
their way inta framers bins!!!!!!!!

[highwayman]

LMAO. Burbot is giving spelling lessons. What's
next, carpentry lessons and joke telling for all
those wannabe comedian framers?

[uneducatedbum]

i don't like cargill but i like the cwb...can i only deliver to cargill?

[bucket]

Some other grainco will sign a handling
agreement with the cwb.