Market Volatilty

[cottonpicken]

In my opinion anderson doesnt know what he is talking about.

The number one reason commodities are going up in price is that investors are getting out of paper and into tangibles.

If any analyst,speaker,commentator,person fails to see this fact than you should ignore them.They dont understand how and why things are the way they are.

[charliep]

Cottonpicken

At least I have the courage to put my name behind what I say. There is room in the moderator area for name, background and interests. You can then address the good questions that chaffmeister put to you I am curious as to how you would run a grain company for for that matter the CWB.

[cottonpicken]

I thought i addressed all of chaffs questions, and he still has to respond to one of mine.

Heres a question to you charlie-

Why is the broad market ignored when it comes to ag prices?

Its as if people think there is no relation.

Most of the time on this site is spent debating cwb issues and not real world market factors.

And how do you run a grain company?
How about a few very smart,proven people to steer the ship and a million gophers.

[TOM4CWB]

Charlie,

I don't see why the bond is not useful to grain growers in western Canada... in your opinion.

If people believe that growers depend too much on the Security the CGC provides... Change it to a CDIC/Bank bond type system... where the first $100,000 is covered.

I don't see why this is an unreasonable request for inter provincial and international sales of Canadian grain.

Grain sold and used within the province... is already exempt... because it is constitutionally not in the flow of trade and commerce... until it crossed prov. boundaries or internationally.

If an 80% bond level... of a $60,000 level of coverage was applied to CGC security... then those who wanted better coverage could do it through the Ag Clearing system.

Most folks I talk with... think this is just to allow the little grainco's a start up opportunity... and that the big grainco's will still be CGC bonded in some fashion. My MP told me this on Friday night.

The proposed legislation removes the CGC security... totally... if I have this wrong... someone please straighten me out!

The Resolution past at the Western Barley Growers last month... did not request the CGC drop all security... and encouraged the Ag Clearing system be given a chance to work.

I voted in favour of that Resolution.

I believe it would be as foolish to drop CGC monitoring of large grainco's... as it would be to drop the CDIC $100,000.00(www.cdic.ca) assurance system for depositors.


Why exactly is their any LESS RISK... for us selling our grain into the international market place... than their is for bonding our bank accounts?

Why should we be required to pay a big chunk of change for Security on our grain... when bank bonding is taken for granted... and the banks cost if they want to do business in the flow of commerce in Canada?

[parsley]

How about a few very smart,proven people to steer the ship and a million gophers.

Yah.

As along as I can jump on the ship I want.

That's why we need choice.

The gophers are eating derivitive papers for lunch because the provens were actually proven long-view-stupid.

Parsley

[cottonpicken]

I wasnt defending the board.

I believe in the freedom of choice.

[charliep]

I don't think anyone here ignores the outside factors and I actually find your comments interesting. It is a factor in the market but not the only one. I would be basing optimism on it but I wouldn't be betting the farm. Perhaps our discussion has been about risk (which is both opportunity and negative consequences) and how a business deals with it.

Just as an interesting note, no one has chewed me for not suggesting for them to pull the trigger at the most recent top in canola. People who pulled the trigger are likely pretty happy.

I also like to highlight the market side which says there are customers with needs for grain 52 weeks a year and a transport/handling system which can't handle 100 % of grain supply in one day, one week or one month. The market handles this by trading over the whole year with all participants (buyers and sellers) able to make decisions.

If you talk to someone from the CWB, ask them how they operate. Ask them about the sales plan. Ask them about a returns to pool table that rates customers/prioritizes their marketing activities. If you understand this, then you will understand page 43 of the 2006/07 annual report (which I assume you have read)

On your question regarding grain companies, I would have 3 priorities. The first is margin. The second is margin. The third is margin.

Margin comes from managing risk (knowing cost structure and being hedged is critical). It is also be efficient (elevator turn 5 to 6 times capacity a least and full use of rail incentives as examples). Lastly it is satisfying customer needs (both farmer and processor/exporter). A strategic area I would focus on would be moving from a commodity market to a product market (as highlighted by Parsley).

[charliep]

tom4cwb

Will leave comments to others. Achieving what I want which is discussion about the issue.

[jensend]

cotton is right - if the whole financial system collapses around us some people would only take note of it to blame the wheat board for the mess!

[parsley]

cotton.

I wasn't talking about Board choice either,if you had read more carefully.

I was talking about choice in a system.

In our system....banking, investing, marketing,etc. all of them are the fence posts of the capitalist system we live in, and the only relief valve is choice.

Choice to move money. Out of the country. To the tin can. To gold. Out of gold.

Choice to replace stocks with cash.
Or vice versa.

And so on.

Markets inevitably govern everything.

Everything.

imho, of course.

Parsley

[cottonpicken]

Charlie,i ment no disrespect to you or anyone else,it was another over blowen frusterated response with effenince on over blowen(something i'm good at,right or wrong).

And in my own defence and many others here,emotion and tone are hard to convey in written form compared to face to face.Hence the popularity of internet dating.

I'll pull up some charts and tell you the dates of some horrible sales periods for board grains.

[charliep]

Cottonpicken.

Apology goes both ways. I over reacted as well.

I couldn't say when the CWB has made sales. Their arguement would be around their ability to achieve premiums in world markets based on single desk power versus ability to time sales. To be fair to the CWB, I don't think the CWB can 100 % time sales given they have to work around customer needs and logistics.

Perhaps the arguement in this thread (and in the farm community) is about the price pooling/contracting under CWB versus an open market where grain companies/others would have to compete for business to achieve a steady flow of product. You will have your own opinion as to whether canola marketing or wheat marketing fills your business and personal needs better.