something to think about

[wd9]

chaffmeister re: Any futures rally (like the one we've seen this year) would directly impact farm prices on CWB grains - no lag, no dilution, no profits held back and shifted around.

But given the dollar cost average of pooling for everyone, predicting what the long term pro would be is difficult or as slow to react as it is now because of the length of time to realize all the sales. There is a lag now because pooling 'smooths the rally' so to speak. I see the CWB 2 having the same issue.

[wd9]

Also, could the CWB 2 run in the form of no pool at all? By only having contracts if a grower wishes to pool they can on their own by DCA. The single only reason for the CWB to exist would be the single seller and in effect wouldn't even be doing the marketing decisions or pooling for that matter of the product.

[TOM4CWB]

WD9,

The CWB selling system is backwards... to extract a premium for grain growers.

Sales staff need to be the brokers for the growers... not the enduser buyers.

I smooth talking enduser can talk the CWB out of millions... in minutes... if the buyer knows what they are doing.

And there is no grower to worry about, no bin door to pry open...

no bidding up of prices to fill the big volume sale.

India loved it...

when they locked the US out of sales...
because the Ausies, CWB, OWPMB, take pricing signals from the US futures...

the US were locked out...

which artifically lowered values... and presto...

why would India want the US to spoil it all by having the expectation of sales push the price of wheat higher?

Talk about a grain robbery... close to the early 70's and the ruskies!

If the single desk were reversed... and couldn't sell unless "designated area" growers released the grain... THEN we would be doing something!

The CWB is supposed to be our sales facilitator... not making the sales themselves!

[chaffmeister]

wd9 –
You’re right about the difficulty in predicting average price over a whole crop year. I’m suggesting a basis locked in for the whole year as the initial – but not the flat price. All the CWB needs to do is to predict a basis level – should be a lot easier than predicting the whole flat price (and more accurate). Think about canola – which would you be more comfortable predicting – average farm price over the year, or average basis over the year. I’d take basis anytime.

In my concept, the only “dollar cost average of pooling” is in the basis; everybody’s flat price would be different, based on where they price it. Let’s say the basis is 70 over (cents per bushel) but at the end of the year, the CWB figures there’s another 10 cents to distribute – then the final payment will be 10 cents a bushel.

wd9 – could you clarify your last post. I think you’re saying that unless the CWB is pooling, there is no need for it to exist.