New CWB Contracting programs

[charliep]

Just a note to let everyone know the CWB has announced their 2001/02 contracting alternatives today. This year it will cover all classes of wheat (excluding durum). The will also be a barley alternative. See their web (www.cwb.ca).

I will be working on analysis for next week. Any early thoughts? Can these contracts be combined with the buyback program to deal with some of the issues brought up in previous links about direct US sales/other specilized markets like organic?

[TOM4CWB]

I will be the first to take the plunge!

Basis is critical to the function of these programs. It looks like a healthy contingency fund is being built on the backs of the 2000-01 participants. I have no problem with paying risk money up front, if the rules are clear and I know where we are headed.

Problem 1.

The CWB does not use this program to hedge basis risk, which is the most controlable and easiest to manage in non-board crops. When I sell a basis contract, then the buyer can go and plan shipping, make sales, plan efficiencies of volume and make an efficient plan to market this grain, 6 months before the actual action.

We need the CWB to start thinking the same way! We miss some opportunities by not locking in basis, even if we end up with a little wider basis, if we deliver good product, the buyers will be happy and buy way more than they would otherwise, if we just make them wait and not commit to the basis.

The CPS-CWRS issue is difficult, I don't know who to beleive the quality side, or the discount price side.

If I have any brains price paid should mean more than a slick article which hypes a wheat and sounds real good. CPS White has been a nitemare in hype vs. price!

The CWB markets high volume CWRS the best, no question. Which probably means since we are stuck with one player, better grow what they can sell the easiest!

Does that help at all Charlie?