New CBH Deferred Sales Pool opens 5 December
CBH Marketing and Trading is pleased to announce that the CBH Deferred Sales Pool will open for participation from 9.30am AWST on Monday 5 December 2022.
The Deferred Sales Pool (DSP) is an open access pool, meaning anyone can participate.
For simplicity and factoring in the delayed harvest progress, access to the new pool will be via contract only. Guaranteed Access Contracts can be secured directly in LoadNet for wheat, barley, canola, lupins, and oats in specific zones as per the table below.
*Update: Lupins have been added to the Esperance Zone since grower email notification
A maximum tonnage limit will apply per contract. The tonnage limit will vary by commodity:
1000mt contract limit for wheat and barley
500mt contract limit for canola, lupins, and oat
If growers seek to participate at levels above the maximum contract volume, they can enter into multiple contracts to achieve their desired total participation, while the DSP is open.
The DSP will also have in place volume limits by commodity for each zone. Once a commodity limit is reached in a zone, contracting will cease for that combination. This means that access to commodities in specific zones may close at different times.
While the DSP has been developed to accommodate significant volumes, growers are encouraged to act early to secure participation.
For further information on accessing the DSP, please refer to the Frequently Asked Questions below.
As previously advised to growers, it is likely the DSP will only have access to shipping capacity from October 2023 onward. This is the key difference between the DSP and a traditional Harvest Pool. This naturally results in a deferred selling program for the product, with bulk sales not expected to be negotiated until well into 2023. This pool will also have a later finalisation date, which we currently anticipate being July 2024.
More information about the DSP on the CBH website, including the pool objective and mandate, the Pool Product Disclosure Guide, the Terms and Conditions, payment options and timing, and fact sheets containing relevant financial information.
Growers can also reach out to their CBH Business Relationship Manager or the CBH Grower Service Centre on 1800 199 083 if they have any questions.
The Deferred Sales Pool product is part of CBH Marketing & Trading’s strategy to adjust its market presence and products to provide as many growers as possible the opportunity to access our prices and drive value for WA growers.
The strategy has been developed in response to the harvest size exceeding the capacity of the network and CBH M&T having a reduced share of the overall capacity on offer compared to previous seasons.
Pending the level of interest in the DSP, we will consider any additional product options which might be suitable and communicate these as appropriate in due course.
FREQUENTLY ASKED QUESTIONS
How is the Deferred Sales Pool (DSP) different to a typical Harvest Pool?
Due to a second consecutive season where the production of grain outstrips the available capacity to export, we have designed this pool product to facilitate surplus grain which would otherwise be held by growers.
This means the DSP will primarily market grain using capacity from October 2023 onwards, which is different to a typical Harvest Pool which would use current season capacity.
The DSP will therefore have a more delayed selling profile and hence be more exposed to future market fluctuations than a typical Harvest Pool, and it will also have later payments and finalisation timing.
Where can I find more information on the Deferred Sales Pool?
For information relating to the pool, such as Fact Sheets, Pool Objective, Mandate, Terms and Conditions, Payment Types and Timing, and the Pool Product Disclosure Guide is on the CBH website.
How can I access the Deferred Sales Pool?
The DSP will be open for contracting at 9.30am AWST on Monday 5 December 2022. Access to the pool is via Guaranteed Access Contract only. We have made this decision due to the delayed harvest progress being exhibited across most zones this season.
What limits will apply?
The Deferred Sales Pool will have a maximum receivals limit. To manage this, tonnage limits will apply by commodity in each zone. Once a commodity limit is reached in a zone, we will restrict further contracting for that commodity in that zone.
Additionally, tonnage limits will apply for each individual contract written depending on the commodity. These limits are as follows:
1000mt contract limit for wheat and barley
500mt contract limit for canola, lupins, and oats
Will contracts be fixed-grade or multi-grade?
Contracts will be multi-grade for all commodities.
Do canola contracts include both CAN and CAG options?
No. Online contracting will be available for CAG multi-grade contracts only. If you wish to write a CAN contract, you will need to contact the GSC or your BRM to enter into a contract over the phone.
What is the delivery date which will apply to the Deferred Sales Pool contracts?
For consistency, the standard delivery date of 31 December will apply to DSP contracts. We will consider the need for extensions to the delivery date as we approach 31 December 2022.
Will the Deferred Sales Pool be offered differently across commodities and zones?
Yes. Further information can be found on the DSP fact sheets.
When will it close?
The DSP will close for a given commodity/zone combination if a tonnage volume is reached, otherwise at the overall discretion of pool management.
Is there any tolerance on contracts?
Contracted tonnages will be for fixed volume with no tolerance applied.
How long will the Deferred Sales Pool run for?
At this stage we are forecasting pool finalisation and payment for July 2024. However, this will ultimately be dictated by the progression of DSP sales and marketing over time.
What is the Estimated Pool Return?
That information is available at the Deferred Sales Pools website under 2022/23 Pool Fact Sheets.
Is Underwriting available on Advance/Loan payments?
Yes, underwriting will be available for the Deferred Sales Pool for $1.90 per tonne.
Can malting barley be nominated to the Deferred Sales Pool?
Yes, however due to the timeframe for likely sales, no premiums will initially be shown for malt barley. If premiums are achieved on malt nominated to the DSP, then this would be reflected in final DSP equity/malt spreads.
Do tonnage limits apply by grower?
No. This product is open access, meaning growers can commit as much or as little volume as they wish, while the Deferred Sales Pool remains open.
Will the Deferred Sales Pool tonnes be eligible for my Pre-Pay Advantage (PPA) recovery?
Due to the timing of payments, the DSP is not suited to being used to repay a PPA facility. As such, the DSP is not set up in our systems to automatically allow repayment to a PPA facility. However, growers wanting to use a Harvest Loan, Flexi Loan or Advance in the DSP to repay their PPA/Grain for Fert facility may contact CBH to make arrangements for this to occur.
What are the fees for the Deferred Sales Pool?
Similar to the Harvest Pools, the fees applied are a management fee of 0.75% of the DSP return, and an overhead cost recovery, which is variable each season but typically between $4-7 per tonne most years.
Do washout costs apply?
Washout costs may apply if growers fail to nominate against a contract. More information is available in the Deferred Sales Pool terms.
How would the application of a 40-tonne cash contract limit/2-day contract halt impact my access to the Deferred Sales Pool?
Any applicable cash contract withholding period restrictions will only apply from 11.30am daily and so contracting to the DSP can occur prior to this time. If you believe you are unable to contract to the DSP because of a cash contracting withholding restriction, then please contact the GSC on 1800 199 083 or firstname.lastname@example.org for assistance.