Adjustment Payment Announced Friday

[charliep]

Just a note the CWB increased your initial payment on Friday. Can be found at:

http://www.cwb.ca/en/news/releases/2003/121203.jsp

I always like to look at the relation between your current initial payment (including adjustment) and the PRO (new one this Thursday).

Comparing at port - Vancouver/St. Lawrence (Initial payment/PRO converted to an Alberta level)

1CWRS 13.5 adj. initial 76 % of the November PRO. (Backing off to Alberta base - 67 %)

1CWAD 12.5 adj. initial 69 % of the Nov. PRO. (Alberta base - 60 %)

Feed barley - adj. initial 69 % of the Nov. PRO (Alberta base - 53 %)

Malt Barley - Adj initial 80 % of the Nov. PRO - adj. initial 80 % of the Nov. PRO (Alberta base - 73 %.

[TOM4CWB]

CHARLIE;

Better late than never!

The feds must have decided how much payment will be transfered from the 03-04 pool to the 02-03 pool, thankfully there is still something left over!

Merry Christmas!

[crusher]

Tom,

Will anyone be able to figure out the losses from the previous pool and the probable transfer payments that occure? Will the closing dates of the pool accounts be the only method, or are there other techniques to hide transfers? I assume the cost to the 2003/4 pool should be too significant on a per tonne basis because of the larger volume - but what a crappy way to run a busiess!!

[charliep]

Final payments for 2002/03 will be announced sometime this week. Don't know if the announcement will include the actual dollar value of losses to the past years wheat excluding durum or whether that will come with the annual report. The jungle telegraph suggests the loss could be in the $75 to $100 mln. The size of the drought reduced pool is about 9 MMT with the loss likely to be closer to $10/tonne.

[TOM4CWB]

Crusher;

Year end inventories are the biggest change, volume and value...

Transfers from the Contingency Fund are also easily possible through the risk management side of the ledger... if a loss in this account shows up it is a dead ringer give away.

Interest income is also another transfer point that is possible, the 80-100mil/year with none to the Contingency Fund is also easily done (just fine anyway).

The main transfer will not ever hit the books I am sure, could easily occur through risk management activities of the main wheat pool.

The CWB has known this problem existed for at least 8 months, if not longer... so expect the tracks to be well covered.

It would be interesting to know how much Finance Canada is driving the timing of the actual release date.

To Err is human (the CWB sales Dept.), so Mistakes are a surety in a comand and control entity like the CWB... a good reason such control should be turned over to farmers through at the very least a cash pricing framework during the crop year (after August 1st instead of before).

This 02-03 crop year the CWB could have easily extracted at least $40/t out of my own PPO contracts... which stinks because I ended up with a lower price than those who sold to the pool with no risk management.