CBH Flexi-starter Pool has earned its stripes

CBH’s 2020/21 Flexi-starter Pool recently closed and once again has proved itself a worthy option for growers looking to diversify their grain marketing plan.

2020/21 was the third season CBH offered the Flexi-starter pool, and it delivered another strong result for participants, who have been paid returns of between $10 - $14 per tonne above the average prices over the marketing window (July 2020 - April 2021), with a similar outperformance when compared to the average of prices over the harvest period.

This followed phenomenal success last year where the 2019-20 pool performance was $38-$40 per tonne better than the average of prices over the marketing window, and nearly $15-20 per tonne better than the average of prices over the harvest period.

Pools allow growers to incorporate a variety of products with different timeframes and risk profiles into their grain marketing portfolio to achieve a more consistent result over time.

CBH’s Flexi-starter Pool allows growers to capture market values pre-harvest, during harvest and post-harvest, and with the pool finalising in April, growers receive cashflow early in the post-harvest period.

Another key feature with Flexi-starter is the ability to adjust your committed tonnage higher or lower within a defined timeframe to mitigate potential production concerns.

Capturing full premiums for your grain

The Flexi-starter Pool aims to deliver an above-average return through active trading strategies, utilising physical sales, and both commodity and FX derivative strategies.

This season the pool captured elevation margins (premiums achieved by exporting the grain) throughout the marketing window via executing the majority of physical sales into export markets, direct to key end-user customers thereby capturing full premiums for grain under management.

While this strategy has meant the pool has been impacted by recent supply chain challenges experienced here in WA, thankfully due to the accelerated nature of this pool there was no material impact on the final pool result

Early season under-hedged commodity positioning in the pool was supported by markets rallying off the back of issues in corn and bean production and strong global consumer demand. Rumours of Russian government introduced export restrictions also kept markets supported through this period and allowed the pool to retain an undersold commodity position, before switching into a maximum hedge position through October. This strategy enabled the pool to maximise benefit as values trended strongly higher until November, before settling lower for the remainder of the season.

Conversely, the currency was not supportive to pool equity as AUD trended higher over the course of the marketing window primarily on the back of widespread USD weakness. Initially the hedging program was also below mandate, like the commodity program, but a sharp correction lower in AUD through September and October provided a useful opportunity to increase hedging to target levels. From November onwards the currency again moved higher providing a headwind over the back half of the campaign.

Overall, this result is another solid outcome for participants of the Flexi-starter pool which has demonstrated consistently strong outcomes since its inception, rewarding those who have adopted this pool product into their marketing plan.

Flexi-starter now for feed barley and wheat

Following the success over the last three seasons, CBH is opening the Flexi-starter Pool to feed barley, in addition to wheat (all standard grades).

CBH has more than 80 years of grain marketing experience, and their expert team constantly monitor markets and leverage our scale to access market opportunities that aren’t open to individual growers and grain marketing consultants.

If you haven’t looked into pools for a while, the results speak for themselves.