CWB hedging?

[TOM4CWB]

Charlie;

If the CWB pre-priced sales of the 2002/03 pool, then they need to be long till the actual grain is delivered to the customer.

An example I work with is Canola I pre-sold this spring for Crop Share Landlords.

My policy has always been, if I pre-sell unharvested grain that is crop share, I either have personal knowlege and heart felt approval for the pre-sold grain, or I don't price it.

Now this spring I bought back calls on the pre-sold grain that was not harvested... to insure my crop share Landlords got market price this fall...

Otherwise I might not be farming with these people next year....

And doesn't that about say it all???

How could the CWB sell grain they don't have permission to sell, and don't even know if anyone will deliver this year at all......???

Rain;

I am afraid that selling any of next years crop is premature... the risk of the pre-sale is creating is finacially more destabilising than not selling.

The risk reward has to be really positive to the extreme... when conditions have turned so much against production, plus the CWB lack of transparent cash pricing stops a short futures position from paying back the futures loss....

CWB risk on basis has turned out to be close to the futures risk... so I refuse to do any basis I can't assure delivery on...

[TOM4CWB]

Rain;

That comment on the short position didn't quite come out right.

I must have a transparent market that if I am short (or have sold), then if my futures position has lost a dollar a bushel (because the futures went up a dollar), that I can get the dollar a bushel back when I sell the cash grain.

Rain the only way that I have any inkling at all on CWB risk management positions, is the PRO (how slow it reacts to market increases) or info that has been provided to me or those I have a close relationship with that work on these risk management issues.

In July, the CWB was specifically told that they must set up a risk management group to get valid input on marketing strategy... cause I am sorry, but the majority of the CWB directors are cow-calf cattle people (and, or, have sold their soul to the pooling accounts) and don't have a clue about the real commercial world of grain merchandising.

This is why the CWB MUST become a facilitator of grain sales FOR "designated area" grain producers, rather than being responsible for "pulling the pricing trigger" on our grain.

Setting up a risk management group has real commercial confidentiality problems, so will likely never come to pass,.....

therefore only farmers can be responsible for pre-selling grain, in turn allowing the CWB to pre-sell the pre-sold... otherwise the CWB is confiscating the grain through expropriation, which is against the law in a free and democratic society.

The pool MUST be a pool, of the whole marketing year(sales timing wise), or the whole benefit of pooling is completely lost... as no-one can know what the future will bring and the CWB won't pay up for a bad decision.