Wheat Board Lovers

[LWeber]

Grainbeetle - you are spineless. Post with your real name.

How did the CWB FOREX hedging work for farmers?

Where is that in hedging 101?

[TOM4CWB]

GrainBeetle,

Glad you commented...

So if the futures rise... and I can't deliver on a contract; I pay the hedge loss... that's hedge 101.

However if the futures drop... I can't deliver... the CWB KEEPS the gain. I asked why. The CWB reply... because they likely took the hedge off when it actually lost money... so they can't pay.

HMMM hedging losses... 101... The CWB MUST carry the risk management position till the delivery of the grain has been completed. They say they don't.

So explain how the CWB can effectively manage our money on every other hedging position... except PPO contracts? Where are the hedge losses reported on the pool accounts for 2007-08?

Why did the CWB choose to not account for this according to the CWB Financial Report page 80; 'The Corporation has elected to discontinue hedge
accounting and therefore has not adopted Section 3865 – Hedges.'

WHY?

THis is obviously not transparent or responsible management... and it materially affects my PPO payments... because the CWB took the losses out of my basis.

And the CWB is going to continue taking it out of my families bank account... into the foreseeable future.

THATS RIP OFF 101. I object.

[Fransisco]

I put this on another thread but since grainbeetle is playing over here and Tom mentioned "ripoff" I thought it relevant over here as well.

...Now this is interesting on page 52 it says that the final pool distribution on malt was $289.71 per tonne, .33 per tonne was moved to the contingency fund.

On page 55 we see that feed barley pool A had a final distribution of $279.41 after 51.91 a tonne was moved to the contingency fund.

Page 57 feed barley pool B comes in at $279.59 after 7.04 is taken for the contingency fund.

So without the board redistributing farmers money it would have been

Malt barley $290.04

feed pool A $331.32

Feed Pool B $286.63

So at most they got a 3.41 per tonne or 7 cents per bushel premium for malt over their own feed sales at worst they lost 41.28 per tonne or 90 cents a bushel.

And we all know the last place you sell feed barley to is the board because the domestic market kicks the heck out of it almost every time.

They can't even beat the price of feed barley with malt sales! Pathetic.

[chaffmeister]

GrainBeetle:

You’ve brought much needed attention to a huge problem. Staff at the CWB, Friends of the CWB, the NFU, and the Borg, haven’t got a clue about grain merchandising. When it comes to hedging, trading, spreading, arbitrage, etc you guys haven’t got a clue.

1. The PPOs are terribly flawed. Have been from Day One. The hedge model they devised makes excess money (net) when the market moves up and loses money (net) when the market goes down. That is not within the definition of a hedge.

2. The CWB got caught by “spreads”. The Annual Report says “The factors that caused the losses in the wheat programs relate to commodity hedging and pricing. The placement of hedges in exchanges and future months plus the cost of rolling the hedges in an inverse market, never significant in the past, became very significant in the current year because of the large volatility.

3. Also: “As well, prices offered to producers are based on nearby prices. In an adverse (I think they mean “inverse”) market, the nearby price offered is higher than can be achieved by hedging forward in the futures market.”


Why in the world would you price close to 4 million tonnes “based on nearby prices” and hedge it in the nearby futures month when you must have known that much of it would end up being shipped (and priced) in a later period?

GrainBeetle, if you think you can answer this, please don’t even try. The only answer is “there is no good reason.”

They looked at rolling hedges as a given – “it was never significant before” tells me that they knew they would be rolling hedges. So they don't understand rule Number One in grain merchandising: matching purchases to sales and that includes hedge placement.


Explain to me how you can defend this.

[wilagro]

Why don't you AMATEUR accountants learn how to decipher financial statements so that you all come to the same conclusions? Like a bunch of chickens with the head cut off, you all go in different directions make invalid comparisons and try and second-guess what the CWB did or should have done. You calculate right to the penny how much the CWB has cost you. If you are all so darned smart...why aren't you working for the CWB and showing them how to do the job properly? Why aren't you talking to your reps on the board? You are not going to get anywhere spouting here...not a bit except to reinforce your rage.

[TOM4CWB]

Wilagro;

It is you that are blind.

There is a real problem... and if you cannot see this... I feel sorry for you.

These jokers have taken you in... and the statements they just put out are a dreadful example of a lack of transparent reporting of the financial results of the 2007-08 crop year.

If you don't care... that is your problem. Don't condem us for wanting to know why it costs us an extra $50/t... to do business with the CWB.

Perhaps $50/t does not amount to much on your farm... to many of us... it is the real and needed income to put together operations in a manner that allows our next generation to continue our family farms.

Have a good day.

[chaffmeister]

wilagro:

As usual, you're missing the point. This isn't about accounting. I'm quite confident that the accounting has been done properly - remember, accountants are only score keepers.

The point is that the statements - the professionally presented financial statements - show the CWB has lost a lot of money. We're all in agreement:

$89.9 million loss in the contingency fund.

$226 million shortfall in discretionary trading in the pool accounts.

$20 million profit in "cash trading". Not bad, eh? Problem is it went into the contingency fund instead of back to the guys that sold the grain on those "cash trading" deals. So this isn't really a loss - unless you're one of those guys. (I thought the CWB was supposed to pass on all profits from marketing to farmers, not keep some of it to cover up their own incompetence.)

No "invalid comparisons" here, wilagro.


The real problem here is the likes of you, wilagro.

Your support of the CWB is so blind that you even attack the detractors when they're proving the CWB's shortcomings. (We're not even proving it - the CWB has done that with their annual report. We're just mad about it.)

With the global markets in disarray as they are, we really don't need any more of the bullshit you and other members of the Borg spew here and where ever else you can. If you want to defend the CWB, go ahead, but do it with facts. The kind of tripe you throw out is just a waste of time.

BTW:

1. I wouldn't waste my time taking any of this to a rep of the CWB as you suggest. But to the media, legal counsel and Ottawa - that's a different story.

2. Before you go calling anyone AMATEUR anything, better change your own tactics. Whenever you post here I always feel you're like the guy that brings a knife to a gun fight.

3. These are serious problems and you're right to notice the rage. What astounds me is that you seem to only have rage for the ones attacking the CWB.

Can you explain why?

How can you support the CWB with so much passion and yet so little knowledge?

[wilagro]

chaff: As I have stated before...if you and others disagree with the way that the CWB operates...take it up with THEM. If I have a beef with Wal-Mart I am not going to complain to their CUSTOMERS...they don't control Wal-Mart.

You Antis do this repeatedly. Like whiny little brats you scream that WE should explain why WE like the CWB and explain THEIR operations and procedures when things don't work as you think they should.

Jeez, you are dense.

[gregpet]

Wilagro

If I have a problem with Wal Mart I do take it up with them, but, I also have the choice to go to Zellers, Costco, Sears, etc...!!!!

If I take my problems up with the CWB the response is we will look into it and I either get a pre-approved response or none at all. My options are apply for an inflated buy back option or deal with the CWB.

See the difference.

Jeez, who's dense.

[wilagro]

gregpet: So why blame CWB supporters for YOUR problem(s)? WE are not in a position to answer for them.

You're missing the bloody point AGAIN.

Jeez, there getting even more dense around here.