Risk Management 101... required reading.

[TOM4CWB]

Charlie,

I hope you have access to DTN... as should every serious grower that studies grain marketing!

The article:

"Unstable Markets Trigger Ag Upheaval
Major Ethanol, Chicken and Cotton Players Make Bad Market Bets
Chris Clayton DTN Ag Policy Editor"

IS REQUIRED READING.

If growers don't think they can afford DTN... they shouldn't grow grain and market that grain. This is a primary marketing tool in the information age we live in!

Tom Jackson

[TOM4CWB]

From Viterra to prosper:

"Chuckchuck,

Risk management MUST be transaction based... through the whole cycle... which the CWB fails to carry out.

It is just plain suicide to run the CWB the way it is done now... with the pool accounts taking the main share of the risk... especially with the huge hedge pressure PPO's place upon risk management.

The whole collapse in the US IS because of the lack of self discipline... to properly manage risk... subprime... the financial melt down...

This on DTN;

"High-dollar commodities and market speculation during the spring and summer now result in speculation about survival of companies that include VeraSun, Paul Reinhart Inc. and Pilgrim's Pride Inc."

..."STRATEGIES WERE ABANDONED

While analysts can state each company's situation is a reflection of their overall industry, the connection between the ethanol producer, cotton merchant and the chicken company is a repeated theme of being unable to cope with the margin calls on the futures market, leading each company to abandon its hedges and risk-management strategies, so when the futures prices came down, none of the companies was able to reduce the costs of its high-priced commodities.

DTN Senior Analyst Darin Newsom points out that with VeraSun and Paul Reinhart Inc., each company would have been better protected remaining in the futures market. Each company could have sold futures at the higher price for which they bought their commodities and bought back as the futures price dropped. If the futures price went up, the value of the actual assets they bought, either cotton or corn, would have offset the losses in futures, which is the actual value of the hedge."


The CWB placed massive risk on the pool accounts... and the returns clearly show the result.

Every grain grower in the 'designated area' needs to understand why the CWB fails the grade.

The pools can't take the risk... the losses are massive when the market goes against the sales dept of the CWB... which is just about always!

Market direction CANNOT BE PREDICTED... Marketing 101.

We simply cannot afford the massive losses the CWB collects... and covering your eyes (with your head in the sand) Chuckchuck and timm... won't make the massive losses any less.

The CWB marketing system is broken... get it?
BROKEN.


If the CWB is to prosper... the same standards MUST APPLY.

BUT the CWB says they have NO PURPOSE... if they operate simply like a grain company does. THE CWB 'can't compete'! WHAT GARBAGE.

If this is the actually the truth... then END the CWB... we can't afford the risk or the losses these misguided wingnuts (at the CWB)gather for us!