Changes to CWB pooling year end choices

[charliep]

Thanks for highlighting. Is there any information posted on the website (did a quick search of the CWB but found nothing) or simply in the contract terms.

Not a big fan of cashplus but currently the best game in town for malt barley. Given the fact I would like as much of my money in the bank (particularly for malt barley when the Eurpean crop is better than last year and there is promise in the Aussie crop) and not a promise, I would use cash plus whenever possible. Negotiate all terms (you have the ability in cashplus) including delivery timing and payments for cost of carry (interest, storage and risk).

[charliep]

Thanks for highlighting. Is there any information posted on the website (did a quick search of the CWB but found nothing) or simply in the contract terms.

Not a big fan of cashplus but currently the best game in town for malt barley. Given the fact I would like as much of my money in the bank (particularly for malt barley when the Eurpean crop is better than last year and there is promise in the Aussie crop) and not a promise, I would use cash plus whenever possible. Negotiate all terms (you have the ability in cashplus) including delivery timing and payments for cost of carry (interest, storage and risk).

[BarleyGuy]

Charlie,

The only reason Cash Plus looks good, is that the Pool looks so bad!!

There were plenty of opportunities this winter for the Board to agressively market sales at prices near $400 a tonne when buyers around the world were worried about supplies, but they were greedy and the business went elsewhere!! Now they are a price taker in a falling market and the farmer is the one going to pay.
Buyers are taking the ABC approach now...Anyplace But Canada.

Offshore prices are now in the low $300's and falling. Where's the premium? Not in the Canadian farmer's pocket, that's for sure!

[charliep]

BarleyGuy

Note your question/concern about the CWB not selling this spring.

Had a conversation with another farmer and he expressed concern about the CWB taking positions in the cash market (i.e. selling malt barley on behalf of farmers that hadn't been contracted by farmers). His arguement would be the CWB should never forward sell any grain that is not backed up by firm farmer contracts/delivery commitment. Implication is the CWB would have had to package these opportunities from this past spring and offer a firm cash price/delivery commitment to farmers. With these prices, farmers would have contracted but also likely would have assumed the grade/selection risk (unless an act of god included).

Thoughts?

[charliep]

Even more interesting, how much malt barley was sold this past spring? How guaranteed is the current PRO? What is the relationship between the PRO and the cashplus offering (i.e. does the cashplus come out at 80 % or 90 % of the actual sale price? is some of what is left over get redistributed to support the PRO?) Does the CWB restrict sales to support the PRO or go petal to the metal with the impact of lowering the PRO?

[katoe]

The Cwb was pushing cash plus for malt a lot earlier this year at very high levels but very few industry players would participate. And it looks like it payed off for them now with lower values.