Charlie,
I saw this @
http://www.tfc-charts.com/marketquotes/
"WASHINGTON, Jun 26, 2006 (UPI via COMTEX) -- A U.S. government study has found that huge reserves of oil sands in Canada will undermine the world's oil-producing cartel.
The Joint Economic Committee study released Monday by Rep. Jim Saxton, R-N.J., estimates proven oil reserves rank Canada second only to Saudi Arabia, with the possibility that Canada's reserves may be even larger. Strong economic incentives would exist, even with oil prices at half the current level, to ramp up oil sands production and more than double output in 10 years.
"The large Canadian reserves of unconventional oil and their rapid development is very good news for consumers in the U.S. and around the world," Saxton said. "While these reserves can supply only a limited amount of oil at the current time, their development is exactly the kind of thing the (Organization of Petroleum Exporting Countries) cartel has hoped to avoid.
"OPEC pricing policy for many years has sought to extract the maximum profit from oil consumers without providing enough incentive to trigger the development of costly energy alternatives. However, OPEC's production quotas and failure to invest in expanded capacity have severely limited the conventional oil supply in the face of an unexpected increase in Asian demand."
www.upi.com"
In application to wheat... where does this lead us?
1. I know of no "cartel" that the CWB has formed to maximise our "designated area" growers returns; with other growers globally.
Yet the CWB compares itself with OPEC on a regular basis.
2. PRO's are two sided... they provide a price signal to buyers and well as growers... and become a self fulfilling prophecy. Bad news if you are a "designated area" grower being told to reduce wheat and durum production.
The CWB "Single Desk" system is not at all designed by legislation to help extract premium prices from the market. The opposite in fact could be argued.
3. The CWB spends millions $$$ on "Designated area" growers, the Canadian Citizen, and governments; funds attempting to brain wash them into believing the "single desk" is a benefit. WHy?
Could it be because the majority of the funds aren't comming from "single desk" supporters anyway... (tending towards the 80% production - from 20% of the growers: rule for commercial production)
So the CWB doesn't believe there is any downside to the strategy of spending their way into popular acceptance throught P.R. promotions.
How on earth does all this add up to a profitable Grain and Oilseeds sector in western Canada?
When the CWB depresses Wheat and Barley prices (PRO's & PPO's that are innefficient and distorted)... they lower the bar for all other grains and oilseeds... and the buyers have less competition to bid up prices... and bid in acres in this sector.
What do we do Charlie and Lee?
I saw this @
http://www.tfc-charts.com/marketquotes/
"WASHINGTON, Jun 26, 2006 (UPI via COMTEX) -- A U.S. government study has found that huge reserves of oil sands in Canada will undermine the world's oil-producing cartel.
The Joint Economic Committee study released Monday by Rep. Jim Saxton, R-N.J., estimates proven oil reserves rank Canada second only to Saudi Arabia, with the possibility that Canada's reserves may be even larger. Strong economic incentives would exist, even with oil prices at half the current level, to ramp up oil sands production and more than double output in 10 years.
"The large Canadian reserves of unconventional oil and their rapid development is very good news for consumers in the U.S. and around the world," Saxton said. "While these reserves can supply only a limited amount of oil at the current time, their development is exactly the kind of thing the (Organization of Petroleum Exporting Countries) cartel has hoped to avoid.
"OPEC pricing policy for many years has sought to extract the maximum profit from oil consumers without providing enough incentive to trigger the development of costly energy alternatives. However, OPEC's production quotas and failure to invest in expanded capacity have severely limited the conventional oil supply in the face of an unexpected increase in Asian demand."
www.upi.com"
In application to wheat... where does this lead us?
1. I know of no "cartel" that the CWB has formed to maximise our "designated area" growers returns; with other growers globally.
Yet the CWB compares itself with OPEC on a regular basis.
2. PRO's are two sided... they provide a price signal to buyers and well as growers... and become a self fulfilling prophecy. Bad news if you are a "designated area" grower being told to reduce wheat and durum production.
The CWB "Single Desk" system is not at all designed by legislation to help extract premium prices from the market. The opposite in fact could be argued.
3. The CWB spends millions $$$ on "Designated area" growers, the Canadian Citizen, and governments; funds attempting to brain wash them into believing the "single desk" is a benefit. WHy?
Could it be because the majority of the funds aren't comming from "single desk" supporters anyway... (tending towards the 80% production - from 20% of the growers: rule for commercial production)
So the CWB doesn't believe there is any downside to the strategy of spending their way into popular acceptance throught P.R. promotions.
How on earth does all this add up to a profitable Grain and Oilseeds sector in western Canada?
When the CWB depresses Wheat and Barley prices (PRO's & PPO's that are innefficient and distorted)... they lower the bar for all other grains and oilseeds... and the buyers have less competition to bid up prices... and bid in acres in this sector.
What do we do Charlie and Lee?
Comment