CWB open call on wheat and barley

[TOM4CWB]

Charlie,

Did you know the CWB has an open call, without having had signed an A,B, C or D series contract for 2001-02?

Does this mean the CWB sold more than what they got contracted?

How could this happen?

Doesn't this kind of make a farce of the whole contracting system?

[TOM4CWB]

Charlie,

Why is the CWB forcing farmers to hold durum over the year end, not having accepted any of the C or D series high grade durum offered by us?

Is this fair when the CWB has an open call on wheat and barley, without any contracting at all? What about farmers with bad drought last year, and now this year too, making them hold durum till next year when they got a bad yield to start with, is this fair?

[charliep]

I should let Tom H. reply but my interpretation would be that there are additional sales to be made over and above existing CWB contracted volumes for wheat and barley. I would assume that the CWB will get somewhere between zero and none on this call (anyone who has by passed 4 contract calls will likely hold).

Your durum question is a lot tougher. I don't have the privelege of looking at the CWB sales program but my guess is there are not sales on the books/little potential for late summer movement. The CWB/grain companies are not wanting to bring grain into the system that doesn't have a home either. The fairness of making someone hold crop over into a potentially lower priced new crop market is something I will do the civil service soft shoe on.

As a hunch (not based on any research), I wouldn't be surprised by an July call on durum of some kind but this has to be countered by better crop conditions in the southern prairies and the desire not to plug the elevator system with a non mover.

[charliep]

Charlie pretty much summed this up - Sales commitments for wheat and barley are covered, and there may be additional opportunities if there are more visible stocks that come into the system. Given that things started out really dry this spring, but have turned around in many areas, there may be some grain that was held that might come to market. This is an opportunity to invite that grain in to meet sales. And onfarm stocks are likley pretty tight, so huge amounts are unlikely.

Of course the durum situation is considerably different. Additional sales (if substantial amounts could be booked with untraditional buyers)into this pool would drop prices. Also, as Charlie mentioned, there is considerable resistance to brining grain into the rationalized handling system that isn't destined to move directly to market.

Here is my estimate in the loss of segragation capacity since 1998 - 35,680 bins; 2001 - 15,250. (assuming cribs less than 10kt have avg of 35 bins, High throughputs over 10kt have 20 bins). There are approximatley 40% of the segregation capacity left in the primary elevator system compared to just 4 years ago.

This shows that there is considerably more pressure than previous years to ensure that grain entering the system has an intended market.

Tom