CWB Adjustment Factor Basis

[charliep]

Lee and I had a conference call with the CWB today going over the changes to their programs. One of the things I wasn't aware of was the full implications of the basis adjustment. The basis adjustment reflects the amount of wheat sold in the pooling system when you bull the trigger on either CWB producer pricing option.

Anyone who has signed a basis pricing contracts (locked in futures but not basis). Under the change, you have locked in the basis adjustment factor on the day you signed the BPC. It will be shown on the confirmation fax that highlights your tonnage and other commits of the contract.

I will leave Lee to answer questions/provide clarifaction.

[melvill]

Charlie and I both wonder about the wisdom of making the adjustment factor visible this year even though it has always been there but not visible. It just adds another level of complexity though, I'm sure, there are some or many who will be whole-heartedly enthusiastic about its visibility just because it is visible.

Just remember if you sign a basis contract before August 1, even if you lock the futures first, the adjustment factor won't be part of that contract or tonnage at any time. However, any new tonnage signed up after August 1 will be impacted by the adjustment factor regardless of whether you lock the futures first or the basis first.