CDN $$$ and CWB

[TOM4CWB]

Charlie;

I don't get it!

The CWB is shrinking back from marketing our wheat/durum because of the rising CDN$$$ to a large extent... not that the price in the US$ is historically low for Durum ahd HRS/HRW.

But what is the plan?

I understand many... the majority of currency traders; assume a 90 cent CDN dollar by mid 2006... if not higher.

SO what is the CWB market plan?

Wait for the CDN dollar to drop and then sell?

Why was not a risk management plan put in place at a 80 cent CDN $ wouldn't that have been a smart thing to have done... be doing?

We may well wait a very long time for the CDN $ to get under 80 cents again... or am I missing something?

[charliep]

Not sure your question.

To put some context around your question, here is the monthly chart for the loonie.

http://futures.tradingcharts.com/chart/CD/M

A higher valued dollar is likely a reality over the next year. Everyone has to analyze the impact on their business and make decisions about whether it is worthwhile offsetting it using the tools available. It may be more incentive to forward price. As an example, I don't think I would roll CWB contracts because of this - I would price and replace with US futures if I were bullish.

Is the CWB actively hedging the loonie? No idea. Should they? That is something than can be talked about.

[TOM4CWB]

Charlie;

Sorry too many questions in too many places!

I see on DTN Dec 2/05:

That World durum production is estimated at 27 million MT, down close to 20% from a year ago. Canadian durum production is up only about 8%.

CWB EXPORTS of DURUM SLOW. The CWB is blaming a higher Cdn $ and higher US/Cdn. supplies for their problem. CWB PROs have been lower for some time. The middle of PRO for 1CWAD 13% durum is currently about $4.14/bu at the elevator.


Now does that frame the above post in a different light?

I would like to know how, when our major market has less supply domestically this year... if we cannot sell now.... when will we?

If in fact we factor in the CDN $... WE ARE AT HIGH HISTORIC PRICES!

Now... what is the plan... if our loonie is headed higher... how do we expect to get more next year?

Wouldn't a better market signal for less production actually be a realistic price for the avaliable durum?

Won't other producers (with currency devaluations to benefit them this time) who see a high price just produce more in 2006... and leave us sitting with our bins full and at a lower price again next year at this time?