Farmers
Delivery Exchange Contract
The Delivery Exchange Contract (DEC) pilot program is available for the 2006-07 crop year to producers delivering Nos. 1, 2, 3 or 4 Canada Western Red Spring wheat (CWRS) to a delivery point within rail zones 3 (CN) and 12 (CP). The size and geographic scope of the program is being limited during the pilot period to ensure trading and delivery operate efficiently, while still providing a meaningful test of the program.
- The DEC adds to the array of marketing choices now available through the CWB. The program was designed after extensive consultation with producers, who have frequently and consistently indicated a desire for more flexibility, predictability and control over delivery.
Highlights of DEC include:
- Increased flexibility so producers can manage the timing of their deliveries throughout the year to meet their business needs, especially their needs for enhanced cash flow.
- Enhanced ability for producers to use the CWB's Producer Payment Options to generate greater cash flow early in the crop year.
- One hundred per cent (100%) acceptance, similar to Guaranteed Delivery Contracts.
- A volume limit of approximately 10 to 15 per cent of CWRS production in the region.
- Sign-up on a first-come, first-served basis until October 31, 2006 or earlier if the volume limit is reached.
- Producers are expected to deliver 100 per cent (100%) of their contract.
- Delivered grade and protein must match contracted grade and protein.
Beginning August 1, 2006, producers can sign up in 80 tonne increments which will then be assigned equally to four delivery periods:
- August 1-October 31 (Period 1);
- November 1-January 31 (Period 2);
- February 1-April 30 (Period 3); and
- May 1-July 31 (Period 4)
For example, Producer A commits 160 tonnes of 1 CWRS 13.5 and higher to a DEC. The CWB will then allocate 40 tonnes to each delivery period as follows:
Delivery period | |||||
---|---|---|---|---|---|
Grade and protein | Net tonnes | Period 1 | Period 2 | Period 3 | Period 4 |
1 CWRS 13.5 and higher | 160 | 40 | 40 | 40 | 40 |
Producer A can now either deliver the 40 tonnes in each appropriate delivery period or offer to trade these tonnes with another producer into other delivery periods. For example, if Producer A would like to deliver 160 tonnes in Period 1, they would need to find another producer (or producers) who are willing to trade their Period 1 delivery opportunity for Period 2, Period 3, and Period 4. To deliver 160 tonnes in Period 1, Producer A's delivery periods will appear as follows:
Grade and protein | Net tonnes | P1 | P2 | P3 | P4 |
---|---|---|---|---|---|
1 CWRS 13.5 and higher | 160 | 160 | 0 | 0 | 0 |
Producers who sign up for DECs should ensure they know the quality of grain they are committing to the program as misgrades are not part of the DEC program. However, if a producer signs up under DEC and later determines that the grade is different than what was signed up, they will need to find another producer in an opposite position with whom to trade. Producers should work with their grain company to deliver the grain within the delivery period.
When can I sign up?
Starting August 1, 2006, producers can commit to DECs by phoning the CWB at 1-800-275-4292 with their PIN, completing the DEC sign-up application (PDF format 85 KB) form and fax it to the CWB at 1-204-983-8031 or working with their elevator. Producers sign up in 80 tonne increments (e.g. 80, 160, 240, 320 etc.) for the following grade and protein categories.
Contract code | Grade and protein category |
---|---|
E1 | No. 1 CWRS 13.5 and higher |
E5 | No. 1 CWRS 13.4 and lower |
F1 | No. 2 CWRS 13.5 and higher |
F5 | No. 2 CWRS 13.4 and lower |
G1 | No. 3 CWRS |
G5 | No. 4 CWRS |
After we have processed your sign-up, a confirmation letter will be sent to you outlining the grade and tonnes committed under each of the four delivery periods. Producers will also be able to view their contracted tonnes under DECs through the CWB Web site e-services link.
Trading
If producers are interested in offering to trade their DEC tonnes to other delivery periods, they can phone the CWB at 1-800-275-4292 with their PIN, complete the DEC offer to trade (PDF format 65 KB) form and fax it to the CWB at 1-204-983-8031 or work with their elevator. The information you provide on the form will be used by the CWB to post your offer on the CWB Web site and to communicate your contact information to other producers who are interested in making a trade. By signing the form or providing the information over the telephone, you consent to the release of your name, telephone number and e-mail address.
Producers who are interested in viewing trade offers can refer to the Summary of offers for Delivery Exchange Contracts.
If there is an offer that you are interested in, contact the CWB Business Centre at 1-800-275-4292 to obtain a list of producer names, phone numbers and e-mail addresses. Producers make their own arrangements for trading their delivery periods with another participating producer.
Once producers agree to a trade, both producers must complete and sign the DEC trade agreement (PDF format 59 KB). For example, Producer A would complete their section of the form and sign the document on the corresponding line. Producer A then faxes the form to Producer B. Producer B completes their section of the form and signs the document (both signatures must appear on one form). To complete the trade, this form must be faxed to the CWB. Once the trade is processed, each producer will receive a confirmation letter indicating their current tonnes in the DEC program. You can also view your contract tonnes by delivery period on E-services. Grain companies will also be able to view contracts to ensure they can accept delivery of the DEC and to record the correct contract number on the cash ticket.
To view offer to trade examples, see below.
Example 1:
This producer wants to trade 60 tonnes from period 1 to period 3.
Offer | Require | |||||||
---|---|---|---|---|---|---|---|---|
20 tonne increments | Enter the contract code (e.g. E1) for the grade and protein category you are offering in the appropriate delivery period box(es) | Enter the contract code (e.g. E1) for the grade and protein category you require in the appropriate delivery period box(es) | ||||||
Tonnes | Period 1 | Period 2 | Period 3 | Period 4 | Period 1 | Period 2 | Period 3 | Period 4 |
60 | E1 | E1 |
Example 2:
This producer wants three separate trades of 20 tonnes each from delivery periods 1 and 2 and 3 into period 4.
Offer | Require | |||||||
---|---|---|---|---|---|---|---|---|
20 tonne increments | Enter the contract code (e.g. E1) for the grade and protein category you are offering in the appropriate delivery period box(es) | Enter the contract code (e.g. E1) for the grade and protein category you require in the appropriate delivery period box(es) | ||||||
Tonnes | Period 1 | Period 2 | Period 3 | Period 4 | Period 1 | Period 2 | Period 3 | Period 4 |
20 | E1 | E1 | ||||||
20 | E1 | E1 | ||||||
20 | E1 | E1 |
Example 3:
This producer wants one trade of 40 tonnes from delivery period 1 or 2 or 3 into period 4.
Offer | Require | |||||||
---|---|---|---|---|---|---|---|---|
20 tonne increments | Enter the contract code (e.g. E1) for the grade and protein category you are offering in the appropriate delivery period box(es) | Enter the contract code (e.g. E1) for the grade and protein category you require in the appropriate delivery period box(es) | ||||||
Tonnes | Period 1 | Period 2 | Period 3 | Period 4 | Period 1 | Period 2 | Period 3 | Period 4 |
40 | E1 | E1 | E1 | E1 |
Example 4:
This producer wants one trade of 40 tonnes from delivery period 1 into period 2 or 3.
Offer | Require | |||||||
---|---|---|---|---|---|---|---|---|
20 tonne increments | Enter the contract code (e.g. E1) for the grade and protein category you are offering in the appropriate delivery period box(es) | Enter the contract code (e.g. E1) for the grade and protein category you require in the appropriate delivery period box(es) | ||||||
Tonnes | Period 1 | Period 2 | Period 3 | Period 4 | Period 1 | Period 2 | Period 3 | Period 4 |
40 | E1 | E1 | E1 |
Example 5
This producer wants to trade the grade and protein of his Delivery Exchange Contract.
Offer | Require | |||||||
---|---|---|---|---|---|---|---|---|
20 tonne increments | Enter the contract code (e.g. E1) for the grade and protein category you are offering in the appropriate delivery period box(es) | Enter the contract code (e.g. E1) for the grade and protein category you require in the appropriate delivery period box(es) | ||||||
Tonnes | Period 1 | Period 2 | Period 3 | Period 4 | Period 1 | Period 2 | Period 3 | Period 4 |
160 | F5 | E5 | ||||||
160 | F5 | E5 |