06-07 Durum

[TOM4CWB]

Vader and Agstar77,

After talking with US trade, growers, and Wheat organisation people... the other shoe drops... on CWB durum sales to the US.

In a rising market, the enduser/buyer always wants to prebuy stocks as far out into the future as possible.

RE: 1973 Russian Grain Robbery... this year it's the 06-07 CWB "Marketing is Heaven"

US durum endusers were commenting to US growers at industry meetings in 2006 summer... that they were not buying US Durum because US growers wouldn't sell cheap enough.

The CWB would, and since there is no durum futures to back up a future sale for a US durum marketer... the CWB obviously sold & got the movement.

Who took the risk... and was it worth it?

Canadian Durum growers now must fill these cheap high risk sales (in hindsight now) and US growers are now filling the international premium markets... at a real & large increase in the value of their inventory.

Further, the CWB even gives these international sales to the US growers... at good premium prices... by holding back Canadian high quality durum in our "designated area" graineries.

"Designated area" growers... can be assured on the second the market tops out... and heads down... our preselling on high risk inventory... will not be rewarded with general enduser prebuying many months into the future...

The Endusers simply will buy hand to mouth in the dropping market... and draw down inventories. NOT Prebuy Expensive CWB Stocks.

This is why the CWB pool tends to bring discounts on both ends of the pricing cycle.

1. On the way up... we sell inventories cheaply with a "It's too good to be true" "It can't last" attitude...

2. On the way down... we can't sell our pool inventories to endusers... because they won't buy them at the top of the market that is clearly headed down.

THE CWB POOLS allow deep discounting... as the CWB has no transparent cost /purchase price... and the CWB can crash the market quickly just as they did in January of 2003. There is no bottom to the pit of money they can access... as the Government of Canada is funding CWB sales through the guarrentee on CWB Pool Accounts.

We must change this system, to be responsible, disciplined, and at a fair price to "designated area" Growers.

[sawfly]

this time last year tom you were mad as hell that the board didnt take all the contracted wheat.
you wanted them to even sell more at the lowest prices in years. and before that you were mad about the board not selling into the summer rally of the year before.

hindsight is 20-20 , the board just has to quit following your advice.

[stubblejumper]

Tom why don't you run for the board?

[TOM4CWB]

Sawfly,

THe advice I give and have given for a decade... to the CWB is simple:

1)Respect the individual, produce daily cash pricing opportunities... every business day of the year during trading hours.

2)Allow those who enjoy pool style marketing... by having them sign up the acres to be pooled by July 1 each year.

3)Have the CWB become an exchange of sales, that facilitates the marketing of "designated area" wheat and barley... by individual growers.

New twists that might help;

a) if the CWB believes it is too much work to deal with each producer; use the agents of the board to do some of the contracts.

b) if the CWB doesn't have the will, skill, confidence or ambition to risk manage a pool properly, contract it out to the best company that can provide the service, or;

c) have each agent of the CWB run there own pool, for their own clients, and provide incentives for multi-year deliveries (loyalty payments) if you like... and have competition drive the returns higher by pools bidding up the prices between agents.

There are so many opportunities for us to acheive so much more... without even changing the CWB Act.

Sawfly... we would rather throw it all away... than change in a progressive manner that helps "designated area" growers!

I can have the most productive ideas possible... but allas they are irrelevant...

For in the eyes of sawfly, vader, agstar77, and any other single minded believer; I am a CWB detractor and a fool... no matter what I say!