Loonie crashes over 1US cent...

[TOM4CWB]

Charlie,

This strong upward grain market is not a freight train I would step out in front of right now...

This may well be a grain market rally of historic purportions...

Does the CWB forward hedge the Canadian dollar for the next crop year too???

[charliep]

Can't argue with your freight train analogy. Everyone should have a too good to be true price, however and be prepared to pick away (a piece at a time) what crop crop they have to sell. An analogy is that markets that are rallying like current ones are like airplanes - we have never left one up in the air yet. Looking outside Canada, the market will over react eventually - the question is when.

With regards to the CWB dollar, I don't know what hedging positions the CWB would have taken. My guess would not be a lot but I have no way of confirming.

I highlight it is a good thing for the CWB to have a risk management approach. As people, these processes are not perfect in that the market (particularly this year) is behaving like a bucking bronco on whole bunch of fronts including commodities, currencies and equity markets. This is not an easy process for anyone or organization. The big thing is to have a plan going in and a way of evaluating success/failure after.

[cowman]

It is good that grain prices are on the move up. Unfortunately, if you have nothing to sell, then who cares? And quite frankly that is going to be the situation for a lot of grain farmers in the feed grain belt. The barley is getting close to a write off and the wheat...well give it a few more days. The liquidation of the cow herd in the drought areas is not only a disaster for the cow/calf sector but will be a disaster for many years for the grain farmer(and many, many others). No real solution, it's just how it is. Where will you sell your barley when the feedlots can't access enough calves? Maybe the U.S. will take it but you better be prepared to compete with heavily subsidized corn.
I truly believe people don't yet realize what is happening here with this drought. When the rains return who will be going back into cows? A lot of the "cow experts" are quitting and they are never going back in! To old and worked for nothing too damned long!

[rodbradshaw]

Cowman
I agree with you on people getting out of the cow game and never getting back in. When people get to a certain point in life most people won't want to get back in. P.S We have lost three this week, 2 to lightning and a third who layed in a small depression and couldn't get up, still better off than the fellow in France who had 400 sheep jump off a cliff into a ravine.

The loonie is probably going to test lows as traders scramble to make money in this topsy turvy market place.I had one fellow tell me he had gone long the CDN dollar as he tought we were going to escape again but it seems that the money market has old habits that are hard to break and always go running backto the US dollar.