First FlexPro Value Posted Today/Adjustment Factor Positive FPC

[TOM4CWB]

Dear Charlie,

I had an interesting conversation with the CWB this morning.

The adjustment factor was not done right/the table set up did not reflect the negative $19/t basis plus the $4/t adjust charge.

Iteresting that the ladies on the 800 line answering the phone... are as baffled as growers are... I had hoped I was wrong... but;

IF my grain is not a drag on the pool... cause I priced out 7 months ago... I should share in the positive adjustment factor cause I am not pulling the pool down!

This system makes less sense... every time someone tries to explain what the PPO dept. is actually doing!

The CWB has a license to steal money from my farm... it has never been clearer than it was today!

The 'Single Desk'

Has a 'Single Purpose'

'The Lowest Price is the Law!"

The CWB could make Zellers BLUSH more than the sun on a hot dry dusty August evening!

[charliep]

My only observation is that new is at a significant discount to old crop. from a cash flow perspective, old crop is at 90 % of the PRO while new crop is at 60 of a lower valued PRO. The CWB pooling system is meant to achieve an average price for the crop - that is their target and measure of success - see the annual report. The CWB basis and pricing programs impose significant risk on anyone who chooses to use them to achieve a better price than the pooled one. The issue of the PPO contingency fund hangs out there and needs to be recognized. Not opposed to being long something but also have a eye on profit objectives and cash flow needs.

My preference if I were bullish would be to sell old crop into the 2007/08 pooling year and reown something (futures or options). Would prefer to be long corn or soybeans but would wait for the market wreck to stop - think we both will agree with the expression the trend is your friend. Today's market was interesting in terms of slowing the fall but not a sign things are headed higher. Just my opinion.

[charliep]

mcfarms

Hope you pulled the trigger on all your epo strategy. Note that the CWB reduced their PRO today out of sequence with their normal releases.

Will be interesting to watch what happens with EPO premiums - should be lower given less risk but....

Another piece for anyone that reads this (maybe get comments from others). Use the cashplus for 2008/09 malt barley. Take your money at delivery (realizing their is still a small final payment - forget the CWB buzz words). International malt barley prices are dropping. Realize there is still weather in Australia/here but I still like the warm fuzzy feeling of depositing the whole value for a sale in the bank.

[mcfarms]

Charlie

Just on the last shot , unfortunately I felt I had better wait on my net tonnes after delivery of the final 07 production next week as we have got one bin giving us some headaches due to an aeration issue at fill last fall.
Am Now thinking about plan B on the last of the 07. Have to work some numbers tommorrow.