Loonie Direction?

[charliep]

What are your thoughts on the loonie value? How are you handling currency risk?

[TOM4CWB]

Charlie;

We were waiting for your crystal ball to reveal where we are going!

It is really hard to believe the US$ can have long term staying power (up), especially with the US election, Iraq election being put off, Buchanan set to 3 way the US presidentials...

The US has the power to do about anything it wants right now... a weaker US dollar is positive for the US economy, it is doubtful they will drop this tactic before the Elections this fall, wouldn't you say?

[charliep]

Need to fix my statement. Should be operating or trade debt over 5 % (annual).

[rain]

Charlie is the area a lot of people did. I would say 75% took EPO on Wheat and feed barley. Like you I can not see why anyone would not.

[TOM4CWB]

Charlie;

We could be approaching 2mmt on the EPO side, which is much increased from last year, when premiums were 10 times higher.

If cash flow is not a issue... then even $2.00/t for something that is really yours anyway... is alot to pay.

Virtually everyone knows this year that PRO's are on the low side after last year... plus CWB elections are commimg... so the PRO's will rise to make the CWB look better!

WHy not wait till the end of March... and get an even better EPO... I did mine at the end of Jan (21st) before the last extension to March 31st... was a big mistake! WHAT A RIP OFF!

[poorboy]

Like Tom said, the CWB is lowballing the pro's, so there is not much incentive to take the EPO as it looks like there is no downside to the pool. I was hoping that as they start making some committed sales on the contracted tonnage that they would be raising the pros and then I will take an epo. If like last year and they had sold a lot of the crop before seeding, then the pool should be much higher than it is because the Jan. to June 2003 wheat price was decent compared to now.

[rain]

If the CWB is loosing it ass on freight cost. As some people are inidcating. Why does everyone figure the PRO can only go up. We took the EPO because we think and feel the pooled accounts will go lower due to mismanagement. Also current prices are above the long term average for CWB Wheat.

[TOM4CWB]

That should have been NADER, not Buchanan.

[charliep]

Would agree with rain. Higher prices/payments are not a guarantee. There is nothing any more comforting to me than having money deposited in the bank/loans paid versus living on promises. This applies to all crops (feed grains and pulses as well) versus just the CWB.

[TOM4CWB]

Charlie;

How soon you forget what a bunch of wild eyed bulls Canadian Farmers are;

We corporately would sell our souls to get a chance on being a part of the "BIG MOVE" up in the markets... which is why we love CWB spin doctors who promise the moon and the stars!

Emotion is what drives CWB marketing and commitments to CWB programs, NOT LOGIC.

THE CWB has been masterful in keeping the whole market/monopoly debate in the emotional realm... fear of multi-nationals, fear of market choice, fear of the nieghbour getting more than me.., fear of change.

Stick with the pool... you will get the most that way...

On the 130,696t in last years EPO on wheat, on average only $15.25/t was gained...

And timing was still everything!

2002-03 Initial/Final on CWRS #1 13.5 $250.20/t

Adjustment payments of $32/t on Sept 17th and Nov 27th of

On Aug 01/02 the EPO nets $203.20/t
On Aug 08/02 the EPO nets $202.70/t
A loss/waste of $2.00-2.50/t, no chance of doing a higher EPO later in fall.

New PRO $242/t
On Aug 09/02 the EPO nets $213.00/t
On Aug 19/02 the EPO nets $215.05/t
On Aug 21/02 the EPO nets $214.55/tA loss/waste of $2.75-4.00/t, no chance of doing a higher EPO later in fall.


On Aug 22/02 the EPO nets $224.60/t
On Sept 03/02 the EPO nets $228.10/t
On Sept 10/02 the EPO nets $230.10/t
On Sept 20/02 the EPO nets $230.60/t
On Sept 25/02 the EPO Nets $230.60/t
A loss/waste of $2.50-8.50/t, no chance of doing a higher EPO later in fall.

New PRO @ $308/t
On Sept 26/02 the EPO nets $263.95/t
On Sept 30/02 the EPO nets $266.70/t

On Oct 01/02 high in FPC CWB $300.94/t
off Dec 02 futures, offering prices over $380/t Portland

On Oct 10/02 the EPO nets $266.20/t
On Oct 21/02 the EPO nets $268.70/t
On Oct 23/02 the EPO nets $267.70/t

New PRO @ $312/t
On Oct 24/02 the EPO nets $270.05/t
On Oct 31/02 the EPO nets $269.55/t
On Nov 11/02 the EPO nets $265.80/t
On Nov 21/02 the EPO nets $261.05/t
On Nov 27/02 the EPO nets $260.30/t

New PRO @ $296/t
On Nov 28/02 the EPO nets $259.65/t
On Nov 29/02 the EPO nets $259.65/t
Nov. 29 last day of EPO.

[TOM4CWB]

Nov 27th CWB Adjustment payment on 1CWRS 13.5px was $63/t

[crusher]

I EPOed all my board sales based on risk cost. If you include the storage payment, the premiums are not that expensive, and lots can happen between now and December 31st.

[TOM4CWB]

Crusher;

I did the same, cash flow is critical, it would be nice to see a 95% EPO in the future.

If the CWB can be as effective as the 2002-03 PPO Finanacials in risk management of EPO's indicates, there should be no reason why this isn't possible.

Further;

If I want to pay the new premium being charged, I should be able to lock in the higher EPO offered by the CWB, at a lower cost as I already paid the premium on the lower tier of risk value.