LOOKOUT: Derivatives... 600Trillion

[charliep]

On the basis, will note the cost of carry (read interest) is higher with higher prices. Similarly, most companies (open market and CWB) have put higher margins in their basis to reflect risk around volatility. A final factor has been the development of hedge funds and others who pushed the futures markets for their own reasons not related to actual business - thus the disconnect cash and futures over certain times.

Will note I have purposefully (likely because I don't know) the questions on derivatives. Futures at least are somewhat open and visible.

[TOM4CWB]

Charlie et al;

The PNW Portland/Seattle basis is $2/bu OVER the futures... and has been in a steady climb for months.

Why is bringing the facts forward on the CWB a rant?

"Customs officials are carrying out further inquiries into allegations of under valuation..."

Another CWB give away?


http://www.sundaytimes.lk/081116/News/sundaytimesnews_05.html

"Customs seize Prima wheat and vessel

An alleged false customs declaration by the shipping agent of Prima flour company may lead to the forfeiture of Rs. 3.2 billion worth of wheat and the seizure of the vessel that carried the cargo to Trincomalee.

According to a customs inquiry, the government would have suffered a loss of more than Rs. 200 million, if the cargo had been cleared. The vessel and the wheat for Prima Ceylon Ltd, the biggest flour producer in Sri Lanka, were seized by the Customs at the Trincomalee harbour pending investigations.
Documents to clear the consignment shipped by the Canadian Wheat Board to Prima had been submitted before the shipment arrived at the Trincomalee harbour, though the usual practice was that the documents should be handed over after the shipment arrived. The documents were produced two days before the budget in which a cess was imposed on wheat imports.


The controversial cargo at Trincomalee harbour
The ship MV Boreal was carrying 72,000 metric tonnes of wheat, of which some 9,000 metric tonnes were due to be unloaded in a port in Singapore, a port which the ship had passed by on the way to Colombo.

Customs officials said they found that the documents were not in order and ordered the seizure of the entire consignment valued at Rs. 3.2 billion and the ship.

After the detection of the 9,000 mt on the vessel was made, Prima Ltd has issued a certificate that the consignment was being supplied “free of charge’ by Prima Ltd in Singapore to Prima Ceylon Ltd in keeping with an Agreement for Transshipment Services.

Initially, Customs officials attempting to visit the ship for inspection were not permitted by Prima officials in Trincomalee, compelling the officials to obtain a directive from the Government Agent Major General (Retired) Ranjith Silva who provided army and police escort to carry out the inspection. The shipment has been placed under the custody of the Government Agent as the investigations proceed. Major General Silva contacted by The Sunday Times yesterday declined to comment on the matter.

Customs officials are carrying out further inquiries into allegations of under valuation, violation of the import control act and violations of banking regulations. Under customs regulations, the entire consignment could be forfeited and the vessel confiscated for the offence.

Prima Ceylon Ltd General Manager Jay Ong declined to comment. The Sunday Times learns that while the investigations were pending Customs Director General S.A.C.S.W. Jayathilake ordered that the wheat should be unloaded into separate silos and not transferred to any other silos.

However, customs officials said that investigations would be difficult if the wheat was unloaded into silos."

[TOM4CWB]

Charlie,

Futures are Derivatives of actual trade in our grains... and the trade of them clearly are transparent for everyone but the CWB.

Contracts that do not have underlying futures... have big problems right now... with no risk management possible... sellers are at a massive disadvantage when prices plummet.

We can see that Vancouver cash canola is lower than in the spring of the year for instance... and lower right now than in Australia (because of the drought).

So how do we maintain an 'orderly market' when world trade is a shambles... because we cannot even get governments to honour their own laws and enforce contracts duly executed and that are legitimate?

It is easy to steal from a pool... because to the lack of transparency if the thieves are not even exposed!

I hear EDC is even backing out of export insurance (car parts reported yesterday)...

Are we just going to let the whole system collapse around our feet?

Jensend,

It is interesting how 'defensive' you become about discussions that involve the CWB... WHY?

The CWB is the biggest player on the block... why is it offensive to discuss what they do?

[jensend]

don't confuse defensive with amazement that you can link everything to the cwb. i'm sure you can show the cwb is the cause of aids, juvenile delinquency, drug dependence and probably the misery of psoriasis. have a good day!

[TOM4CWB]

jensend;

Very interesting how YOU are the one that refuses to defend your position with a logical argument!

[charliep]

I note the number is 600 trillion. what is the next series of numbers after a trillion? 1,000 trillion.

[jensend]

tom i posted a logical answer to the aspect of the discussion bgmb started. you spun that into me being a cwb supporter somehow. i haven't had a permit book for years. i think you should read a book, get a hobby or learn to knit; this cwb thing is making you a little loony!