CWB Daily Price Contract

[Zaphod]

It's interesting to note that on July 21, the last day you could sign a DPC, the protein spreads were still huge. By the time you could price a DPC, the protein spreads had dropped in half. What are the odds that actual protein premiums at US elevators fell that far in two weeks? So much for transparency.

Also had to laugh when I heard Louise Waldman say in the Western Producer that the CWB's job is to maximize prices "on a per tonne basis". So I suppose if they sell 1 tonne of wheat at a sky-high price, they've done their job.

I checked on the CWB web site and all it says is that they are supposed to maximize revenues for farmers. Last time I checked, revenues were based on price times volume.

It's interesting to note that of their mission, vision and goals, only one line actually deals with returns for farmers. Almost every other one talks about improving the profile or reputation of the board. That's the surest sign of the death of an organization -- when it is preoccupied with navel-gazing.

[btjadenlepp]

I was mad about that halving of the protein premiums as soon as the board was on the hook for pricing too, but according to contacts at informa who monitor u.s. protein premiums regularly, that is indeed what happened in the market, in response to pickup in harvest and high protein in early samples.

i still think the contract is a total crock, designed to protect the cwb and those who pool rather than create any real opportunity, as evidenced by the 'price indications' in the sign up window and the fact you had to commit grain before you could value it. that's just not good risk management in my opinion, but fancy premiums fooled a few into signing up.

note if trying to get out of dpc now, it's possible to assign the contract to another grower who may be interested in opening up to future improvement in u.s. cash prices.

also, i checked the pds price last week and it was about $4/t above the dpc bid for 1-13.5 on the day, for cwrw.