CWB October PRO

[charliep]

Today's PRO was interesting. Just looking at wheat. Looking at wheat ex durum, prices anywhere from up $1/tonne (4CWRS) to down $9/tonne (CPS red). White wheats held up the best (CPS white down $4 and SWS down $5).

I like to look at how the PRO values compare to the Fixed price contracts and EPO premiums (in this case 90 %).

The PRO on 1CWRS 13.5 % protein was $203/tonne ($211/tonne Sept.23 PRO). Fixed price contract today $197.72/tonne ($202.81/tonne Sept. 23) with a $31.38/tonne over basis ($26.52 Sept. 23). All prices basis port. EPO premium (90 %) $3.50/tonne both months.

The PRO on 1CPS red was $164/tonne ($173/tonne Sept.23 PRO). Fixed price contract today $163.15/tonne ($171.21/tonne Sept. 23) with a $6.63/tonne over basis ($4.44 Sept. 23). EPO premium (90 %) $3.25/tonne both months.

The PRO on 1SWS was $188/tonne ($193/tonne Sept.23 PRO). Fixed price contract today $183.50/tonne ($179.03/tonne Sept. 23) with a $39.01 basis/tonne over basis ($26.13 Sept. 23). EPO premium $3.50/tonne Oct. and $4.50/tonne in Sept.

The reason for the strengthening basis as the CWB would suggest is strong sales early in the crop year. I find the SWS basis strength interesting with no further comment.

[charliep]

As a note, both the converted Canadian dollar per tonne futures contracts for hard wheat (MGE and KCBT) were down $10/tonne over the month. CBT converted price was up $2/tonne.

[TOM4CWB]

Charlie;

On the EPO the real story becomes clear.

On Oct. 27 the PRO @ 211/t, 100%EPO was $20.50/t... net $190.50.

Today, the 28th, the PRO @ 203/t, 100%EPO was NET $192.25/t an INCREASE of $1.75/t day to day. Yet the EPO today allows for any increase in the pool over $203/t VS. Yesterday any increase in the pool over $211./t

WE were obviously bang on in saying the PRO was obviously held higher than reality dictated in the Sept. 04 PRO.

Hedges obviously did not hold the pool @ $211... Risk Management did not occur, to hold the pool up... as we earlier suspected.

FARMERS hold the risk on CWB pools... as thought.