CWB Contract Acceptance Levels Announced

[charliep]

Acceptance levels
The CWB has announced the acceptance levels for Series A, durum GrainFlo, Pre-delivery top-up (PDT) and Identity Preserved Contracts.

The acceptance levels are as follows:

Series A and Pre-delivery top-up
CWRS including CPSR and CWSWS: 80 per cent

CPSW, CWES and CWHWS: 100 per cent
CW Amber Durum, all protein levels: 60 per cent

Identity Preserved Contract Program
CWES Special: 100 per cent
AC Commander: 100 per cent
AC Navigator: 60 per cent
CW Hard White Spring Wheat: 100 per cent

GrainFlo
Wheat: 100 per cent
Durum: 70 per cent

Producers will be sent a letter with their contract details and acceptance levels. Unaccepted tonnes greater than 10 will be automatically rolled into a Series B contract.

[charliep]

As a market signal, what does an 80 % acceptance on red spring wheats and 60 % on durum mean? What does it tell your banker?

I note a reference in the not too distant past here to whether the CWB uses technical analysis to trade wheat - an interesting question when their performance measure in their annual report is obtaining a better average price. What do these acceptance levels say about what the CWB is doing to manage their price pooling risk? Your risk as a farm manager?

[charliep]

I see SWS is also 80 %.

Will note that the open market does not allow 100 % delivery on the day you want either. A farmer has more control over delivery based on their financial needs, carry being paid on deferred delivery contracts and market outlook.

The CWB contracting system puts the CWB in control based on how they the market/logisic requirements around their sales plan. The next step is space in elevators close to your farm even if their is acceptance and from their a contract call. A farmer has limited control on delivery - this for a crop that makes a 2/3 payment on delivery and forces you to wait for the rest.

[bucket]

Here is my 2 cents on this. The cwb allowed farmers in the red river valley with fusarium infected grain (technically its feed) to deliver 100% of their grain and gave them a boost in their grade (technically a premium) while the rest of us with normal grain get a 80% acceptance. Lets do the math.

All things being equal and lets give cwrs a price of 7 bucks a bushel. The fusarium feed wheat is worth 4 bucks and my cwrs is worth 7. BUT since I can only deliver 80% my grain becomes worth 5.60 while the red river farmer goes from 4 bucks to 7.

Does anyone see a problem with this. Not to mention the good hutterite in the red river valley grows 100bpa which now nets him another 300 bucks an acre while my 30 bpa just lost another 50 dollar/acre, cashflow and stoerage until the cwb determines they will sell my grain.

And for the board supporters that will say that the price would be lower if the cwb sold 100% - maybe they could start explaining when the cwb started setting world grain prices because that has always been their crutch as to why the prices are not higher. The cwb has always said they have to compete on the world market and don't set the prices. Also with those acceptance levels didn't they effectively take 2-3 million metric tonnes off the market.

[stubblejumper]

there are two more contracts for this crop year.

[bucket]

So why didn't the fusarium contracts have a 80% or less level acceptance. Its mind boggling that the cwb says there is zero cost to blending out fusarium and yet 20% of my grain is to be stored for nothing, with no guarantee of the same or higher price on the next contracts. Take this marketing strategy to the banker. But then the banker won't understand it anyway because they get a bailout on losses that haven't ocurred yet.

[stubblejumper]

my banker understands the CWB maybe you should change banks

[bgmb]

I he3ar ya Bucket,

I am not in the red river valley but a different area of man. Many of my neighbours had high fus so they get this special program.

They deliver more wheat thats lower quality quicker than I do at the same price. Makes zero sense I don't know why there wasn't a 20$/tonne discount for the high fus.

I know I pretty much repeated you but man it feels good to get that out.

Insane.

[dfarms11]

what I would like to know is why did the grainflo get 100% and the A series only got 80%. They both should have been 80%! Why should those guys who were able to get that contract be able to deliver all their grain and not me?

[TOM4CWB]

dfarms11;

Because you are "special"!

The CWB is not about preserving the 'individual'... grain grower in the 'designated area'... it is about preserving the 'single desk'.

Perhaps we should change this?