PNW Wheat vs CDN West Coast

[TOM4CWB]

Dear Charlie,

I was wondering why the CWB is discounting our wheat so much... and why their is such a difference in the Basis:

http://www.uswheat.org/USWPublicDocs.nsf/2a788abb563a2d3285256f35006322c1/84fede74102007a285257380006a06b8/$FILE/PR071026.pdf

PNW DNS 13.5 cash is $9.89/bu

Nov del. FOB $363/t $1.62/bu basis over the futures.

THe CWB is taking over $12.89/t off the futures. WE are still short $70/t just on basis alone.

FPC is $271.38/t DPC is $306.45/t

Interesting that the EPO 100% price is $265/t

Do you have any explanations for why the CWB Basis is so far out of line?

[charliep]

The short answer would be no except to note US is FOB (loaded ship)/CWB is instore terminal.

The CWB explanation would be the fixed contract (and to a certain extent the daily price contract) are all related to the expected final payment so they include existing sales in the pool and expected sales in the future as well as current market prices. The producer pricing options also have all the costs associated with managing the producer pricing options risk for the CWB deducted as well.

[TOM4CWB]

Dear Charlie,

To go from "in store" to "FOB" costs about $12/t?

I know CWB offering prices are much higher than the FOB cost... and the CWB claim that they extract a premium over the US private trade prices that growers receive ... mean the comparison shouldn't be out of line in the first place if the CWB is/was telling the truth!

So when the CWB locks up the basis October 31, my $224/t futures only hedge becomes $210/t... and the CWB pockets much more than $280/t for my families $1CWRS 13.5 wheat.

Is it possible it is costing the CWB way over $70/t to administrate Producer Pricing Options?

Very interesting that Canola basis between Canada and the US... show we should be $20/t ahead of US growers... as did the barley market in June/July 07!

Please tell us where have all our; blood, sweat, and tears gone VADER?

The CWB has promised so much, and delivered so little... they should get an award!



The mood is changing... to end the CWB at any cost...

Because CWB management have proven to be the most unreliable partners... that no sane person in their right mind could afford to maintain as a business partner!

Something to think about...

VADER

A US Montana grower... Friday October 26, could get $293.70/t in Great Falls Montana.

The difference in the futures between my futures only CWB FPC @ $224/t done in January 07... and Friday Oct 26 07 was a hedge cost of $68/t.

Add the $50/t it takes to get the wheat from GREAT FALLS to the PNW port... we have $343/t. This should be close to the value of my wheat Canada West Coast Port B.C.

Take off my $68/t hedge cost... if I had done the transaction in Montana...

I should be cashing a cheque for $$$275/t... dumped in the elevator pit locally in Alberta: more than the CWB FPC offer today at port position on Friday the 26th of October.

ON TOP of all this...

This wheat is going through a US system pushed to the max... that has shipped virtually a whole crop year of wheat in half the normal time!

Instead... with the CWB... I will be cut me a cheque... for $165/t... $110/t below what should have been my families fair wheat return hedged in Jan07!

Who can afford these people?

The audacity of Chairman Ritter telling me the US grower priced too early curls my hair!

THE CWB BOD needs to give their collective SWOLEN heads a BIG SHAKE!

What have I missed Charlie?

[TOM4CWB]

Charlie,

The $110/t is the Canadian premium price $20/t... plus the $20/t handle benefit we should net... on top of the $70/t phantom PPO loss!