CWB took 100% of 'C' Wheats before end of May

[TOM4CWB]

Dear Charlie,

I see the CWB has taken 100% OF THE C SERIES WHEAT... even before the May 31 deadline to sign up for it.

For growers who forgot... the CWB rolls over the part it did not accept on a & b series... if your don't deliver all you signed up on the A... there will be liquidation damages unless you decrease the C series before the end of May.

Where is this massive huge 2008 crop?

[charliep]

You have to have a look beyond supplies and at what would appear to be a large June, July and August sales program (for wheat ex durum). I note the comment on a record April program and a beginning May that is moving supplies out rapidly. Will be an interesting couple of months as things play out to the end of the crop both from the logistics side as well as well as how the supply chain partners "play in the sand box together".

I note your comments about reading over contractual commitments - particularly if you have been rolling volumes forward fro the A and B series. It is interesting as a ag economist case study to compare canola (open market) to wheat (regulated market).

[charliep]

It will be interesting to look at the CONTRIBUTION FROM OTHER REVENUE SOURCES performance measure in the 2008/09 final report (have to wait for 10 months to see). This measure has code words like discretionary trading and wheat pool pricing model. Will be interesting how a monthly bulge in exports is handled in this process and the impact on the performance measure.

[charliep]

My last post would likely fit into the weird category so should
likely explain somewhat.

Exports would appear (will be a lot more accurate in 2 1/2
months) to be 10 % over the CWB December forecast of 16
MMT. A good thing given the combination of customer, price
and logistics. As a performance measure, does that mean
the CWB will show 110 % a and if so what does it mean?

From the sales plan and pricing model, what impact does
more sales than anticipate have on the other performance
measure in the other income/discretionary trading.
Hopefully the CWB would just deposit this extra sales
revenue in pooling accounts and distribute in the final
payments. Being simple is sometimes good.

[Hopperbin]

Charlie or anyone is the CWB getting into any markets on CWSWS wheat? Last year the pool ended up quite nicely but this year the PRO is not so great. From what I understand is that the board does not normally export this wheat due to low price.

[charliep]

Can't help you with the CWB strategy and competitive
pricing other than noting our competition is Australia,
some out of the US Pacific North West and Europe.

The export numbers are in a Canadian Grain
Commission publication (sadly only one year so would
have to set up a spread sheet). Look specifically at
pages 17 and 18.

http://www.grainscanada.gc.ca/statistics-
statistiques/cge-ecg/annual/exports-07-08-eng.pdf

To put the numbers to 2007/08, Canada exported
73,600 tonnes of Soft White - 36,300 to S.E. Asia and
37,300 to western hemisphere. Not sure on what
share goes into the domestic milling market.

A little checking shows the CGC didn't brake out SWS
wheat in the previous two years and rather shoved
into other category I assume - maybe because there
was so little it would bring up buyer confidentiality
reasons.

Perhaps the real story is western Canada is not
competitive in soft wheat world markets and should
really only be growing for the domestic one - milling
and ethanol.

Given the CWB has separate fpc contracts for soft
white, not sure why the CWB doesn't go to separate
pooling for this wheat at worst or 100 % cash pricing
as a best solution.