Ration-Al;
The MGE is the Single price discovery point, not counting basis adjustments of course, to in my estimation of over 75% of all CWB business.
Canadian Milling grade wheat is a good size factor on where MGE Spring Wheat futures go. When Stats-Can announced the Higher Canadian Production Numbers, MGE went down.
With the amount of control the CWB has in the high quality milling wheat market, CWB volumes of trade can have a major impact on the futures.
This is why Canadian Farmers should pull the trigger on CDN wheat sales through a cash pricing mechanism rather than the CWB sales dept.
When a cash price is avaliable, the CWB cannot be blamed for 50-70% of wheat risk we carry as farmers carry.
If CWB feed wheat prices were required to be competitive with domestic prices, it would help the present PPO system out significantly.
If we were allowed to switch tonnage between classes of wheat that are traded on the same exchange, it would also be a great benefit.
However, PPO's as they stand involve no diciplined risk management at all by the CWB.
The CWB DOES NOT match hedges put on by farmers with deliveries against these hedges, which destroys the integrety of PPO's as they stand.
This is why we need a cash pricing option/pool, instead of the present pool/PPO's which is nothing but a tax on PPO users, last year the CWB took over $20/t extra off my PPO cheque and put it in the contingency fund.
The MGE is the Single price discovery point, not counting basis adjustments of course, to in my estimation of over 75% of all CWB business.
Canadian Milling grade wheat is a good size factor on where MGE Spring Wheat futures go. When Stats-Can announced the Higher Canadian Production Numbers, MGE went down.
With the amount of control the CWB has in the high quality milling wheat market, CWB volumes of trade can have a major impact on the futures.
This is why Canadian Farmers should pull the trigger on CDN wheat sales through a cash pricing mechanism rather than the CWB sales dept.
When a cash price is avaliable, the CWB cannot be blamed for 50-70% of wheat risk we carry as farmers carry.
If CWB feed wheat prices were required to be competitive with domestic prices, it would help the present PPO system out significantly.
If we were allowed to switch tonnage between classes of wheat that are traded on the same exchange, it would also be a great benefit.
However, PPO's as they stand involve no diciplined risk management at all by the CWB.
The CWB DOES NOT match hedges put on by farmers with deliveries against these hedges, which destroys the integrety of PPO's as they stand.
This is why we need a cash pricing option/pool, instead of the present pool/PPO's which is nothing but a tax on PPO users, last year the CWB took over $20/t extra off my PPO cheque and put it in the contingency fund.
Comment