DPC Buyout 05-06 HWS Wheat

[TOM4CWB]

Charlie,

I got this note from the CWB.

"Contract #500{XXX} has 44.867 tonnes still outstanding against it. You have enough '05-06 deliveries that I could apply against the contract to clean it up if you would like. I only need your authorization to do so.

Alternatively, you could buy out the remaining tonnage as of July 31/06. However, you would be subject to pricing damages of $1,090.27 plus a $15 administration fee. The pricing damages represents the difference between the futures value as of July 31 and your contracted futures multiplied by the outstanding tonnage. ($201.62-$177.32)=$24.30x44.867=$1.090.27."


HMMMM

TO start with the CWB is still supposed to take delivery of over 600t of HWS wheat from us on our 05-06 contracted deliveries some day this fall.

This was supposed to happen in August... BEFORE we started harvest...

but our elevator just had the CWB cancel the HWS Wheat cars to ship it next week.

Now wasn't the DPC supposed to be priced out July 31st?

Where did the CWB get the liquidation charge of $24/t?

I may be slow... but where are these guys getting the information from, where are they comming from?

I understand the Permit Book is the CWB's document... not my property... not in my place of business but at the CWB's... they approve the contracts and record them I assume?



Why wouldn't they tell me about unpriced DPC before July 31st?

[charliep]

I will let the CWB answer your question.

I find the continuing saga around getting old crop grain delivered under contracts from 2005/06, the need to get high quality/protein wheat into an elevator system that is plugged to the rafters and a 10 plus million tonne carryover much more frustrating. This after a time when the market rallied like it did over the past 3 months. I realize there would be differences between a futures market driven by speculators and a more realisic cash market but I still can't see the excuses for our current situation. Something isn't working. It happens every year. Maybe it is because no one (farmers, grain companies, the CWB, rail companies) is accountable. Quit the finger pointing and start the doing.