CWB New Crop PRO/First Basis Levels PPO Products

[charliep]

Just back from Grain World and thought I should highlight the first 2009/10 PRO and the fact that basis levels are being published.

PRO Forecast - http://www.cwb.ca/dom/db/contracts/pool_return/pro.nsf/WebPRPub/2009_20090223.html?OpenDocument&CropYr=2009-10

Basis values - http://www.cwb.ca/db/contracts/ppo/ppo_prices.nsf/fixed_price/2009_index.html

[charliep]

Just curious what people are hearing about and thoughts on the following questions.

1) How will the negative balance on the producer payment options be repaid and from there, increased to a level that can handle the risk of these products?

2) What is the current balance in the producer payment options based on 2008/09 activities/farmer usage? Positive or negative? How much?

3) When a farmer looks at a 1CWRS 13.5 PPO basis of $14.83/tonne, how much is there to look after the legitimate and hedgeable relationship with the CWB PRO/risk management process across the pooling year and how much is being used as a profit center/method to return money to the PPO contingency fund?

[charliep]

That is $14.83 under the Dec. MGE wheat futures converted to Cdn $/tonne.

[charliep]

The first point referrs to the negative balance in the PPO contingency fund.

[Fransisco]

These questions didn't come up at grain world?

[charliep]

The questions were asked but no answers provided. In fairness, the sessions were outlook and this would have taken a lot of time to go over. Will be a good topic for district meetings.

[classicalliberal]

It's about time, you should be able to lock in a new crop price as soon as the futures start trading for that particular commodity.