FPC vs PRO'S

[craig]

Just looking for some comments as I try to figure out CWB programs and what it Means. I did an exercise in comparing the last to Pro's to the FPC on the same day. Here what I got for 3 different types of Wheat. From August to September for 13.5 % protein HRS wheat the Pro declined $3.00 per tonne while the FPC increased $8.55 per Tonne. For #1 CPS red the PRO increased $5.00 per Tonne while the FPC increased $15.91 per Tonne. For 1 CWRW the Pro increased $4.00 per Tonne while the FPC increased $15.00 per Tonne. can anyone make any sense of this.

[Zaphod]

The main thing I can see in the PROs is that a lot of global demand has shifted to the mid-quality wheats. India is the big shift in the market this year and they are mostly looking for winter wheat. But trying to make sense of the basis level changes is almost pointless. Take advantage of them when they're good, but don't try to predict them or make plans based on them.

[TOM4CWB]

Craig;

The Ausie is in drought... so the world will have to pay a hefty premium to pry wheat out of them. Most expensive crop ever sown in AU... now a bad yeild.

The CWB should be able to extract a premium... BUT;

They are so negative at 423 Main... they don't believe these prices are real... Politics pure and simple are causing them to give our wheat away.

A bunch of spoilt brats best explains what is going on! Winers and cry babies.

Too bad we must PAY for the mistakes they (the CWB)are now making.

Good thing the Conservatives have a good budget surplus comming up again...

I would, however, much rather get my income from the market!

[charliep]

craig

I'll let the CWB explain the differences in spreads. I will note the fpc is not a price but rather provides the ability to lock in a payment relationship with the most recent PRO. I will also highlight the fact that most of the mid quality wheats daily pricing contract (based on US markets) has been at a substantial premium to both PRO and FPC values.

Likely have already looked at but the CWB provides very useful historical producer pricing option graphs on their website.

http://www.cwb.ca/public/en/contracts/ppo_workbook/historical.jsp