BPC Futures Only (all gone)

[parsley]

You should be the one to take time to read it melvill.


Yup.

Parsley

[AdamSmith]

I just need to comment on this

But much of the wheat this year was sold between $5.50 and $7, Lokken and other elevator managers say.


"The guys who don't have any wheat left, it just demoralizes them to see that $20 price. To think, if they had been sitting on 10,000, 20,000, 30,000 bushels of wheat, how much money that is."


The other difference between a free market and the board system, is the free market gave a few guys an opportunity, and from that many many more will have learned a very valuable lesson. Something that my father taught me when I was on 15.

Always and I do mean Always have some amount of grain on hand in the bins.

But here the big difference, the mindset of the American farmer will be to take his lumps and learn from that, he will see a missed opportunity, but will become resolved to try and be in a position to take advantage of that opportunity in the future.

In Canada the "Poolie's" mindset has dominated, it is based on greed and envy. This same situation would cause many to whine and complain and bawl "it's not fair, why should just a few get this opportunity?" They would demand that any future opportunity be squashed and laws made to prevent it.

The free market mindset says, " I want me some of that and by god I'll figure out what I need to do next time so I won't miss out.

The Vader mindset, says "This envy is killing me inside, I can't stand it,We just gotta stop this kind of thing from ever happening again"

[charliep]

To the original topic, the CWB has only suspended BPC on new crop. Will come back. Makes me nervous about new crop basis levels.

Not on topic but interesting to note the impact of the volatility on their hedge accounts. Stuff I have seen indicates about 4 MMT of wheat has been put under different forms of producer pricing options in 2007/08 and likely close to 500,000 tonnes under BPC in 2008/09. If you assume the CWB is 75 % priced out in 2007/08 (just a guess), that would mean there is 1 MMT still hedged under the PPO program. Their risk exposure (old and new crop) would be about 1.5 MMT (just a guess - no idea). A 60 cent/bu move ($22/tonne) would have a positive or negative impact on the hedge account of about $33 mln. If a true, doesn't matter but interesting none the less.

[AdamSmith]

The free market doesn't discriminate

The board system always and I do mean always puts the board first, second and third, farmers always last.

Here the board removes opportunity for farmers in order to protect itself and protect itself only.

Oh sure they will claim that they are protecting the pooling accounts, which is farmers money, but last time I checked it's actually the federal government that guarantees the initials.

So why did they shut down Dec 08 pricing?

Think about it?

They've pretty well wiped out the contingency fund, maintaining their margin calls, is my guess. Probably digging into the pool accounts by now.

[Fransisco]

Those American farmers who sold their old crop to early get to sell their new crop into these prices. For us in Western Canada...

[charliep]

Down a different path but too bad the CWB didn't offer the programs of being willing to take a farmers futures position. Forget the name the CWB used in the past but called an Exchange of futures for physicals in other markets.

As long as a farmer could get a hedge off during the trading session, they could exchange the hedge in exchange for a BPC at a later date. Reduces the CWB risk exposure/allows the farmer flexibility in hedging.

[jensend]

I don't imagine much American new crop is being hedged/contracted with futures locked limit down. Then they can't sell futures and I doubt any sane elevator manager down there will contract without being able to take an offsetting futures position.