CWB Pool Return Outlook

[charliep]

Just a note that the June CWB PRO was released today. Wheat was interesting not so much from changes but rather from spreads. White wheat (both CPS and SWS) were increased by a dollar/t. Red Winter and extra strong took the biggest hits(down $9 and $8 respectively).

The other interesting thing is they left the PPO wheat basis marginally increased at $19.91. Their discount for risk, administration and time value is just under $20/t. The implication of the latter is the CWB has built at least some level of optimism into their forecasts. A part of this may be their market forecast builds in futures carry premiums on more defered months sales.

Comments on the PRO/implications on how you will approach CWB producer pricing options strategy?

[TOM4CWB]

Charlie,

This PRO is really political!!!!

How much is this a signal to buyers of what the CWB would "like to get" in the spreads announced?

The initials for the 2001-02 crop year are the only important issue on the PPO contracts, and the CWB will not allow the PPO and new initials to transarently allow us to make any reasonable judgement if things turn out anything like last year!!

How about the CWB announcing the Initials on July 15th, so we all could have reasonable time to make good decisions on the PPO contracts, what do you think the chances of this are Charlie?

[charliep]

I agree with your comment that the CWB should likely provide an early indication of initial payments/spreads that will be used in the producer pricing options. A CWB decision but likely worth raising with the directors.