Crusher
Going to do the civil servant soft shoe and admit to not being able to give good advice. Cottonpicken has called me a bear (which I maybe am but am just encouraging discipline/a plan in a rising market which by the way has ran out of gas in the last couple of days). I do recognize the tighter world wheat supplies (compounded by the Aussie situation) as well as a changing domestic feed market (tighter feed grain supplies and the opening of two ethanol plants). My experience however suggests that a bird in the hand (money in the bank) is worth a bunch of birds in the bush (promise of a higher total payment). If I were to carry CPS wheat, I would do nothing on the contracting side "A" series/pricing and instead hold into the spring with the idea of keeping both the domestic market and CWB pooling ("B" series) open as alternatives through the winter/early spring.
Basis levels are likely to stay ugly (what will change over the next 21 days to improve basis levels). Lee and I get asked these questions (hopefully we provide some useful insite) but the real responsibility lies with your marketing agency to provide answers.
I will note the contingency fund topped out in the 2004/05 crop year at $50 mln. Unless there is a change in regulation/process, all the profits (risk factor from the CWB side) from the producer pricing options in 2005/06 and 2006/07 will get deposited back into the pooling accounts. Farmers have the right to ask questions around the basis calculation for fixed price contracts.
Going to do the civil servant soft shoe and admit to not being able to give good advice. Cottonpicken has called me a bear (which I maybe am but am just encouraging discipline/a plan in a rising market which by the way has ran out of gas in the last couple of days). I do recognize the tighter world wheat supplies (compounded by the Aussie situation) as well as a changing domestic feed market (tighter feed grain supplies and the opening of two ethanol plants). My experience however suggests that a bird in the hand (money in the bank) is worth a bunch of birds in the bush (promise of a higher total payment). If I were to carry CPS wheat, I would do nothing on the contracting side "A" series/pricing and instead hold into the spring with the idea of keeping both the domestic market and CWB pooling ("B" series) open as alternatives through the winter/early spring.
Basis levels are likely to stay ugly (what will change over the next 21 days to improve basis levels). Lee and I get asked these questions (hopefully we provide some useful insite) but the real responsibility lies with your marketing agency to provide answers.
I will note the contingency fund topped out in the 2004/05 crop year at $50 mln. Unless there is a change in regulation/process, all the profits (risk factor from the CWB side) from the producer pricing options in 2005/06 and 2006/07 will get deposited back into the pooling accounts. Farmers have the right to ask questions around the basis calculation for fixed price contracts.
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