Cp's questions to Adam Smith

[Incognito]

Single desk selling works on paper because they are believed to be disciplined sellers. Disciplined sellers.

Disciplined does not translate into dropping your pants, showing the world your woody and making a sale of HARD wheat.

At least in the old days of Forrest Commisioner Gump, he got a woody after the sale - and at his age it must have been semi-hard wheat.

You have a bunch of kids as salespeople itching for the woody - not real conducive to higher grain prices.

CP, since you are beholding to the single desk notion, why is Portland SELLING price $1.00 a bushel over the PRO?

Why is the CWB selling 2 CWRS 13.5 at $245.00 FOB VC last week?

Quick track the IP before my alter-egos reply.

[AdamSmith]

CP, since you are beholding to the single desk notion, why is Portland SELLING price $1.00 a bushel over the PRO?

Results don't matter, facts don't matter, reality is meaningless.

It's all about the theory, the intended purpose.

His questions are a valid as me asking the following:

There are over 1200 homes for sale in Orange County California, there are over 1000 Real Estate agents in Orange County California,

Would homes sell for a higher price or a lower price if there were less Real Estate agents in Orange County California?

The answer is so painfully simple, by the way.

[chaffmeister]

Ok – it’s my turn.

<i>Do more sellers command a higher market price or lower?</i>

When you’re dealing with a commodity like grain, price is determined by supply and demand, not the number of sellers. By your argument CP, you must also believe that more buyers mean higher prices. As a fundamental trader, I track supply and demand; I care very little about how many players are in the sandbox.

So my answer is <b>no – to both</b>.
And since you are asking this question as it relates to the CWB debate, my ancillary answer is <b>I’m afraid you haven’t been listening.</b>

The CWB does indeed distort prices but not the way you think.
(1) There is concrete evidence that the CWB undercuts competition - it can because it doesn't have to compete for the grain from the farmer.
(2) Whenever a buyer buys wheat from grain companies, these graincos buy cash grain or futures to cover their new sale. The market feels the buying interest. However, whenever a buyer buys wheat from the CWB, the CWB does nothing in cash or futures markets to cover. The market doesn't feel a thing - no support, no rally. End-users can cover huge amounts of wheat without sending as much as a ripple through the markets. And guess what - they take advantage of this fact all the time, screwing you and every other wheat farmer out there out of demand driven rallies.

The power of one - working for you. Now CP, let me ask you, does one seller command a higher market price or lower?



<i>Do the members of opec belong to the organization to get a higher price of oil or lower?</i>

OPEC controls (or attempts to control) the <b>production or output</b> of its members. By doing this, they are attempting to reduce the available supply to support prices. <b>Note they are not reducing the number of suppliers – all OPEC members continue to sell independently of each other, hoping to gain from the artificial price support.</b> And of course we know that this doesn’t always work.

So my answer is <b>higher (if they can) and more stable. But they don’t do it by becoming fewer sellers.</b>

[cottonpicken]

First off this isnt a cwb specific question.
Second off i told you guys EXACTLY how to destroy the cwb several times with the response of "thats just that idiot cottonpicken talkin about markets and such".
Ive never disputed(or personally investigated)the allegations made against the board.Its not my area or interest.(granted maybe it should be being a farmer and all)
But the philosophy is sound(perhaps not economically moral).I can except the arguement that its burecatic blunder of biblical porportions like most things governments touch but i can not tolerate the blind rage filled arguements that either side puts forth.Isnt it possible for both to be right/both to be wrong?

Proponents argue that collectively marketing provides an advantage in the markets(which it does).
Oponents say its a giant cluster **** with no direction,control or accountability(which it is).

So there it is a correct philosophy against a correct situation,no wonder there is such a debate.

Which leads me to the question of do commision rates of orange county realators rise or fall with the number of realators in the markets?

The answer is so painfully simple by the way.

[cottonpicken]

So chaff if china drops out of the grain buying market the price isnt effected?
If the ukraine stops exporting grain the price isnt effected?
If opec or any other marketing group cut supply the price isnt effected?
If you have ten plumbers in town compared to one prices are the same?

AS a fundamental trader myself i do care about the number of buyers and sellers in a market(where the hell does supply/demand come from?)

Good luck in the markets,you'll need it.

[chaffmeister]

<i>Proponents argue that collectively marketing provides an advantage in the markets(which it does).</i>

<b>Wrong. In brackets it should read "which it may".</b>

<i>Oponents say its a giant cluster **** with no direction,control or accountability(which it is).</i>

<b>Wrong again. I'm an opponent and I've been saying for years "the CWB provides no advantage in the markets" (see point made above). I have never said it has no direction (it does, but its aiming in the wrong direction), control (come on now - it's full of it), or accountability. (yes, ok, you've got one out of three.)

<i>Which leads me to the question of do commision rates of orange county realators rise or fall with the number of realators in the markets?</i>

The answer is the rates don't change. the realtors that can't make a living go on to something else. For example, here in Winnipeg (as elsewhere) home sellers have a non-realtor option called ComFree. Much cheaper than using a realtor. But realtor rates haven't changed. Know why?


<i>So chaff if china drops out of the grain buying market the price isnt effected?</i>

If China drops out of the market, they take a huge volume of DEMAND with them. It's not the player, it's the VOLUME that matters.

<i>If the ukraine stops exporting grain the price isnt effected?</i>

If Ukraine stops exporting, that takes SUPPLY out of the equation. It's not the player, it's the VOLUME that matters.

<i>If opec or any other marketing group cut supply the price isnt effected?</i>

Read what you wrote - "cut supply" - this is not - as I stated earlier - a function of FEWER SELLERS (OPEC doesn't cut the number of sellers), which is your argument. (You've just made a point in favour of my argument, BTW.)

<i>If you have ten plumbers in town compared to one prices are the same?</i>

If there is no other means of getting your toilet unplugged - no substitution (say, no other person in town capable of doing it), or no imports available (say, no other plumber from a neighbouring town), then you've just set up a great opportunity for a new plumber to come to town. The only way this or any other monopoly can work is if there is absolutely no way for a competitor to come into the market. If that's your scenario, then, no, prices wouldn't be the same. But kind of a lame, simplistic argument for such a complex discussion, don't you think?


<i>AS a fundamental trader myself i do care about the number of buyers and sellers in a market(where the hell does supply/demand come from?)</i>

Sigh...Why do I get the distinct impression that you just like to argue to show what you "know" and aren't really interested in hearing anything contrary? Can you tell me how much wheat was produced last year? How much was consumed? Now - can you tell me how many sellers were there? (And how do you categorize them - Countries? Companies? Individual farmers?) How many buyers?

<i>Good luck in the markets,you'll need it.</i>

Luck - hmmm, you mean like "chance"; like tossing a coin? Never really got into that approach to my trading.

How 'bout answering my question from before:

The power of one - working for you. Now CP, let me ask you, does one seller command a higher market price or lower?

[IAMTHEMOLE]

More sellers, lower price.

[charliep]

Is the opposite true? More buyers, better price.

Interesting everyone concentrates on the supply side of the equation. The demand side is equally important. The major factor driving oil prices is not OPEC but rather reducing supplies of low priced sources of oil/inadequate refining capacity and the world almost unquenchable thirst for oil regardless of price.

[FarmRanger]

Actually Mole, its more volume produced, lower price (if all other things remain the same).
The exception to this is when you get very few sellers who join forces to change the volume produced to below the regular market supply curve (as in oligopolies or monopolies). Now before anyone goes aha, the CWB is a monopoly, therefore monopoly rules applies, think about what it really means.

The CWB has a monopoly over domestic demand, not the supply where it sells into the world market. It has the power to artificially lower domestic prices in Canada as the monopoly buyer of domestic production (just saying it has the power as a monopoly, not saying it does), but it has to sell that volume of production on the world market as one of many sellers.

[IAMTHEMOLE]

Farmranger, Have you sold live finished cattle before? It is a little different than grain in the bin. More sellers definitely means lower prices in that business. A few buyers(the packers) skulk around and have a knack for finding the producer willing to sell at the lowest price. This sets the bar for everyone else. It is the way it is.

[FarmRanger]

Mole, I can see that happening, when there's a financial incentive for the oligopoly to work. There has to be some method of enforcement for them to work as well, loyalty amongst cattle buyers perhaps?

I really doubt this is happening amongst sellers in international grain markets though?

[IAMTHEMOLE]

Our biggest problem is packer ownership. Could you imagine if the grain companies owned 20% of their needs through production.

[kamichel]

I would imagine they would be broke. If they had my farm and my neighbors then they would not be able to afford someone to manage and work it. I can.

[wd9]

Mole, it is because there are more cattle then customers, simple supply and demand. If there was only one seller of beef, they still wouldn't get a good price because you could just import it. No one is held ransom anymore with international oversupply of a product regardless it seems of the number of buyers/sellers. The only way price goes up is supply less than demand - with strong demand and no substitution.

[wd9]

Mole, it is because there are more cattle then customers, simple supply and demand. If there was only one seller of beef, they still wouldn't get a good price because you could just import it. No one is held ransom anymore with international oversupply of a product - esp beef, regardless it seems of the number of buyers/sellers. The only way price goes up is supply is less than demand - with strong demand and no substitution. Oil is in demand, many buyers/sellers with no substitutions, priced accordingly.