CWB prices don't reflect reality

[TOM4CWB]

Charlie;

The single desk monopoly is at it's zenith in distorting the Canadian wheat market today from what I can see.

Why?

CWRS vs. CWRW are very distorted

Sept 8, 2006 USDA Portland report:

HRS 14px $5.50/bu US

HRW 11.5px $5.37/bu US

THe world of wheat exporters are holding massive amounts of high protein wheat... the average HRS US px is 14.9% according to USDA and I believe it is over 13% on the HRW.

In reality our low Px wheat should be at a premium this year to blend down the milling wheat to 13.5% which is the best quality for bread making.

Now... how does the CWB monopoly react?

THey insist on continuing to distort the market place with unrealistic programs.

THe CWRW Select program... must be over 11.5 (11.7%in reality) px to qualify... when none of the CWRW in our area even qualifies... to low px; and we don't get the $10/t premium for doing the extra work and taking the lower yeild of the Select varieties. The worst of all combinations. So the CWB can steal it for a 30% discount to world values. And undercut US marketers... undercutting our own spring wheat in the end.

All in the name of a monopoly that does not exist... a single desk that claims to deliver extra value at no cost to it's supporter: and a deception that leads grain producers to grow products because of a bad habit... rather than realistic market signals.

Ocean front property at 423 Main in Winterpeg... maybe at one time there was! But not any more.

[TOM4CWB]

Basis KCBT Dec, cents/bu, railcar through or to Kansas City

Protein Basis Range Change

Ordinary 22/35 0/0
11.00 PCT 27/40 0/0
11.20 PCT 43/56 0/0
11.40 PCT 43/56 0/0
11.60 PCT 43/56 0/0
11.80 PCT 43/56 0/0
12.00 PCT 43/56 0/0
12.20 PCT 43/56 0/0
12.40 PCT 43/56 0/0
12.60 PCT 43/56 0/0
12.80 PCT 45/58 0/0
13.00 PCT 43/58 0/0
13.20 PCT 40/57 0/0
13.40 PCT 40/55 0/0
13.60 PCT 34/49 0/0
13.80 PCT 31/46 0/0
14.00 PCT 28/43 0/0

When I talked to a Miller in Kansas City; He was insisting there was no low Px winter wheat in the US system, eriod.

Same goes for Hard spring wheat he said.

Therefore the protien payments on winter and spring wheat this year are a matter of CWB form and artificial to the market forces here in North America.

Simply put; the CWB Single DEsk forces the sale of lower Px wheat at large discounts to actual market value.

In fact there are premium markets for lower px wheat... as the numbers above indicate.

Or have I missed something?

[carebear300]

Well said Tom!!!!!!!! exactly what I have been thinking this last month of harvest.