Board Wheat Rollover Strategy

[crusher]

I'm thinking of contracting old crop wheat to the board and pricing it against a PPO for 2004/05. I did this in 2001/2 and it worked okay except for the huge CPS discount. With pricing against Kansas I think the unknowns are less. I would sell Dec 04 Kansas through my broker and convert when basis contracts come out. Does anyone know the date new crop prices will be available?
Other options include selling to the board with EPO and elevator guarantees (Cargill ATL Edmonton was $3.60). I think this strategy may net another $.50 per bushel if I catch it right. Total payment should be August 1st. I'm thinking that board carryover from 2002/3 and early pricing will not leave as much upside. May have spoken too soon, I haven't seen today's PRO's.

[melvill]

My understanding is that the new-crop Fixed Price and Basis contracts (and changes, if any) will be announced with the Feb PRO on Feb 26.

New PROs are out today. Wheats, except durum, are up from $8 to $11/tonne. Durums are essentially unchanged. Feed barley down $1 and malt essentially unchanged.

Interestingly, one major US market forecaster is has become quite bullish on wheat in the last week or so. Now if the Canuck buck and ocean freight would come down!!

[TOM4CWB]

Crusher;

Can you be assured of getting a "c" series contract... it is possible delivery may be delayed into the 04-05 crop year?

If a sign up for "B" will in all likelyhood be called too early.

Usually 15 days storage is all we could get... most times requested delivery in last week of July.

Good luck on the basis... a simple spread between Kansas and the Minni might do the same trick if the belief is that Winter Wheat VS Hard Spring is favouring Kansas.

[charliep]

Crusher

Just a question as to why you would use this strategy? I share tom4cwb concern that there may not be a call on the "C" series (similar to CPS last year). My preference would be to sign the "B" series using the EPO and use some of this money to buy calls if I were bullish. Depositing money in the bank and doing nothing is a good strategy as well.