Whats with the double deductions on feed wheat when using fpc?

[TOM4CWB]

kamichel,

Call your MP and Honourable Minister Ritz. I am sure MP David Anderson is full on side with your issue... we all need to put the screws into the CWB issue on feed.

In 2004 the CWB got out of the bind by giving the futures gain back in cash... and letting every one out of contracts that got feed. How tricky.

In 2007... the loss is there... no money to refund... and the CWB is putting the screws to us!

Fastest way to CWB end possible... put the screws to the folks north of HWY 16... not at all smart!

[charliep]

You are asking me to defend the undefendable. What is needed on buyouts is to be very clear on where the calculation for money that is being asked from comes from. If it were a cash market, the CWB would reference the current cash market or talk about replacement cost. Today, the choice is CWB penalty with no discussion of where comes from. There is no right of appeal. Maybe this last point is mute in the non board but at least you can take your business elsewhere next time.

The reason I suggest a neighbor is you likely have a better basis if earlier pricing - prior to the May PRO would be $5 over or better versus -$7.51 today. You can also save the person the $19.75/tonne screwing on the adjustment factor. Whoever fills this contract has close to a $30/tonne benefit over signing a FPC today.

Might also be patient and wait to see for sure a feed wheat. Given the tight world supplies, we may be surprised what goes as milling quality. That comes to what the down grading factor is and what the potential for blending is where you deliver. You may also want to look buying calls or offseting your position contract with a futures long position futures position on a market dip while you are waiting to sort your contract out.

I apologize for not 100 % going after the CWB. Lots of problems with the contracts that will not be fixed with another set of producer surveys - the need for action has come and gone if nothing else to deal with the perception the producer pricing options are nothing more than lip service/a revenue source to pad the contingency fund. An open market would force these changes (no one would contract with the CWB under the current flawed sytem).

Actually is good to have the current directors allowed to use the contracts - they can experience first hand the problems (at least the one that have been around for a while).

[Steve_Winkler]

I feel your pain guys. I have about 440 acres of CWRS wheat sitting and waiting to be combined. Looks like a good yielder 50 bu./acre anyway, so 22,000 bu. that I would dearly love to price at the FPC price of $304/tonne!! But I am quite certain it may be feed by now with all the crap weather we have had. Gotta hope this price hangs in there for a few more weeks and get some agreement on grade from my elevator. I sure don't want to price anymore and then have it graded feed and lose $30,000. The FPC is great if you have #1 13.5 or even #2 but hang on to your ass if don't and that just ain't right.

Good luck guys.