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Canadian Wheat Board

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Farmers

Producer Payment Options

2008-09 Basis Price Contract (BPC) and Fixed Price Contract program details

Exchange for physicals

The CWB is offering an exchange for physicals (EFP) option for 2008-09 BPCs. The EFP option lets producers take advantage of the futures market throughout the crop year and during futures market trading hours. Producers can take a short position (sell futures) and trade this position with the CWB to lock in the futures component of a BPC. For more information please see the EFP information sheet.

Prices

The pricing schedule link on the left-hand side of this page is updated every business day at 3:00 PM. Prices remain in effect until 9:00 PM Winnipeg Central Time (CT) of the same business day. If futures close limit down, the CWB may not offer prices for the affected months. If the CWB does offer a price on a month that closes limit down, protection may be taken. If the CWB does not offer a price on a given day, transactions for FPCs and BPCs, including rollovers, buyouts and lock-ins, cannot be executed.

Contract transactions

New for 2008-09, producers can conduct FPC/BPC transactions online through e-Services, under the e-PPO 2008 tab. If producers do not have e-Services access, they can sign up online or print off an application form (both options are available on the CWB website) or call 1-800-275-4292. Producers can also conduct contract transactions calling 1-800-275-4292, with their producer identification number (ID) and personal identification number (PIN), or by faxing the appropriate form to 204-983-8031.

Terms and conditions, BPC futures lock-in forms, exchange for physicals (EFP), target pricing order and target pricing order cancellation forms and futures month rollover forms are available on the CWB website.

Sign-up periods

Program Sign-up begins Sign-up deadline
Wheat
Basis Price Contract – December 2008 futures only September 4, 2007 9:00 p.m. CT October 31, 2008
Basis Price Contract – December 2008 basis February 25, 2008 9:00 p.m. CT October 31, 2008
Basis Price Contract – March 2009 futures and basis June 4, 2008 9:00 p.m. CT October 31, 2008
Basis Price Contract - May 2009 futures and basis August 1, 2008 9:00 p.m. CT October 31, 2008

Basis Price Contract - July 2009 futures and basis

 September 17, 2008 9:00 p.m. CT October 31, 2008
Fixed Price Contract February 25, 2008 9:00 p.m. CT October 31, 2008
 
Durum
Fixed Price Contract February 25, 2008 9:00 p.m. CT October 31, 2008

The CWB reserves the right to withdraw these programs at any time, without notice, subject to market conditions.

BPC lock-in deadlines

The deadlines for locking in the futures component of a BPC are listed below. If the futures have not been locked in by the relevant deadline, they will be locked in automatically by the CWB at the price posted for that date.

Futures month Futures lock-in deadline
Wheat
December 2008 9:00 p.m. CT November 27, 2008
March 2009 9:00 p.m. CT February 26, 2009

May 2009

9:00 p.m. CT April 29, 2009

July 2009

9:00 p.m. CT June 29,2009

Basis rolls

Beginning August 1, if producers want to lock in their futures at a date beyond their basis month expiry date, they may choose to roll their existing basis to a later month. This can only be done prior to the expiry date. Producers may also choose to roll their basis backward to an earlier month. There is a $1 per tonne charge for each roll.

Reference grades and deliverable grades

FPC and BPC values are quoted based on reference grades. However, grades other than the reference grade are deliverable against the contract. Below is the list of reference and deliverable grades for each program.

Wheat

Reference grade

Deliverable grades

CWRS

No. 1 CWRS 13.5

All grades and protein except sample grades and mixed grain

CWHWS

No. 1 CWHWS 13.5

 

  CWES

No. 1 CWES

 

CPSR

No. 1CPSR

 

CPSW

No. 1 CPSW

 

CWRW

No. 1 CWRW Select 11.5

 

CWSWS

No. 1 CWSWS

 

Durum

No. 1 CWAD 13.0

All grades and protein except sample grades and mixed grain

Feed Discount

Feed grades of wheat and durum are subject to a feed discount to adjust the value of the contract to the current feed wheat price. The following grades are considered to be feed grades: Canada Feed, No. 4 CWRS, No. 4 CWHWS, No. 3 CWSWS, CW General Purpose and No. 4 and No. 5 CWAD.

Target Pricing Service

The CWB offers a Target Pricing Service for the BPC and FPC programs that allows producers to place an order to lock in a specific price for either the basis or futures portion of a BPC or a fixed price for an FPC. Target pricing allows producers to take advantage of potential futures rallies while leaving the responsibility for monitoring daily market conditions to the CWB. Unfilled orders can be cancelled at any time. There is no fee for this service.

Force Majeure

The CWB offers a force majeure clause, commonly known as an “Act of God” clause, to protect against production risk. The 200,000 tonnage limit for force majeure has been reached and the force majeure option has been withdrawn. Only 50 per cent of anticipated production of any given type and class of grain is eligible for the force majeure provision. The force majeure option only covers production loss not quality downgrading. Producers must deliver against force majeure contracts in priority to any other contracts of the same grain and class, including deliveries to the pool. There is a $3 per tonne charge for this option.

Assignments and Buyouts

Producers who want to get out of all or part of their contractual obligations may choose to assign tonnage to another producer or to buy the contract out. There is a $15 administration charge per assignment. The cost to buy out a contract will vary depending on the relationship between the producer’s contract price and the current contract price and the current futures and the contracted futures. Buyout transactions can be conducted through e-Services under the e-PPO tab or by calling the CWB. To initiate an assignment, please call the CWB at 1-800-275-4292.

Pricing Damages

FPC and BPC contracts require 100 per cent delivery of the tonnage commitment. Failure to do so by the end of the crop year will result in the assessment of pricing damages on any shortfall tonnage. Damages are based on market values on July 31.

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2008-09 Fixed Price and Basis Price Contract

User guide

Worksheets

Information sheets


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