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1. How to initiate a Louis Dreyfus Contract:

a. Call West Coast Wools and obtain a contract number for a daily contract price

NB: Daily contracts can be done on the day of delivery, after delivery or prior to delivery.

b. Deliver against a Louis Dreyfus silo board price

NB: CBH require traders to enter silo prices into the CBH system the day prior to posting, and purchases are not know until the day after posting. Therefore, silo board prices will include risk margin to protect for market moves over this period and will not be always the same as our daily contract prices (which are posted that morning).

2. How to transfer title of grain to Louis Dreyfus contract:

a. Place your grain into Suspense to Louis Dreyfus when delivering to the CBH silo (by indicating “suspense” in the payment section of the CDF) and at a later date transfer your grain via the CBH LoadNet website or fax a completed CBH Warehouse/Suspense Load Transfer form to Louis Dreyfus.

b. At time of delivery, quote your existing Louis Dreyfus Contract number. (NB: These are available anytime from West Coast Wools).

c. Warehouse your grain and transfer later. Similar to suspense. However, write “warehousing” in the Acquirer nomination box of the CDF. Transfer of title is the same as for suspense. NB: Warehousing grain will incur a fee of $0.45/mt

3. Difference between warehousing and suspense:

a. To place grain in suspense, growers are required to nominate a buyer at the time of delivery. Once your grain is in suspense you are committed to price with the buyer you nominate.

b. Putting grain in suspense does not attract a fee, warehousing attracts a fee of $0.45/mt

4. Benefits of warehousing and suspense:

a. Enables growers to focus on harvest activities rather than marketing during the peak harvest period.

b. Allow growers to maximise the benefits of ticket (load) allocation to various contracts.

c. Growers are not forced to sell at the daily silo board prices at the time of delivery.

NB: Once grain is in suspense or warehoused, you are not able to price at the daily silo board price. It must be at a daily contract price (which could be higher or lower).

5. How to monitor Louis Dreyfus Canola prices:

a. Arrange for West Coast Wools to send you a daily text message, fax or email during harvest.

b. Go to www.wcw.com.au and click on the canola tab (there will also be a weekly market report).

c. Call West Coast Wools directly.

6. Louis Dreyfus contract mechanics:

a. Port based prices, exclusive of receival fee ($10.50/mt), grain assessment fee ($1/mt) and GST.

NB: Louis Dreyfus will reimburse the growers for the $11.50 on contract settlement.

b. To calculate a silo price you will need to deduct the industry freight rate from the port to the silo, as published by NACMA.

c. Weight and quality as per the CBH weighbridge ticket details

d. Oil Bonifications above 42%, capped @ 44.5%. Oil deductions are below 42% with no minimum.

NB: Louis Dreyfus can tailor a contract for low oil loads, please contact West Coast Wools for more information.

e. Quality payments are done on a weighted average of all tickets / loads delivered.

i. This allows growers to average high & low oil loads together and bring the average under the 44.5% cap.

f. Tolerance is 5% or 12.5mt (which ever is less)

i. Warehoused or Suspense grain has zero tolerance

7. Louis Dreyfus Payment terms:

a. 14 days after delivery (transfer of title to Louis Dreyfus).

NB: Contracts do not need to be fully completed before the first loads delivered are paid for. If you wish to average your quality results you are better to suspense your grain to Louis Dreyfus until your deliveries are completed, then transfer the entire amount across at once. Otherwise only the loads delivered on a particular day will be averaged together.

b. Please provide full business details (including bank details) to West Coast Wools at the time of contracting so as to facilitate accurate and prompt payment.

c. Louis Dreyfus Australia is a member of NACMA (National Agriculture Commodity Marketing Association) and AOF (Australian Oilseeds Federation). These independent bodies govern all Louis Dreyfus contracts.

d. Louis Dreyfus is a top 5 global trading company with annual sales turnover of over U$20 billion and prides itself as a prompt and efficient payer to growers around the world.

8. How to compare Louis Dreyfus Australia contract prices with other prices:

a. Louis Dreyfus prices are port prices, exclusive of receival ($10.50mt) & grain assessment ($1/mt) fees and exclusive of GST. These fees are then reimbursed on contract settlement.

b. Agracorp cash prices are INCLUSIVE of receival and grain assessment fees. Agracorp prices cap oil at 43.5%, Louis Dreyfus cap at 44.5% (a 1.5% difference in price of $350 = $5.25/mt)

E.g. A Louis Dreyfus price of $350/mt is the equivalent of an Agracorp price of $361.50 ($350+$11.50), and then adjust for different oil caps.

c. Silo prices are delivered silo prices, INCLUSIVE of the receival and grain assessment fees.

E.g. A Louis Dreyfus port price of $350/mt is the equivalent of a Katanning Silo board price of $348.62/mt ($350 + $11.50 - $12.88 freight rate). Then adjust for quality terms.

d. The GPPL canola pool is a FOB (free on board) price, INCLUDING receival & grain assessment fees AND ship loading costs (total = $20.60/mt). The pool does not pay 100% at harvest so an interest component also needs to be considered (for 04/05 this was approx $6.70/mt, see calculation below).

i. E.g. A Louis Dreyfus price of $350/mt port is the equivalent of a Pool price of $377.30/mt ($350 + $20.60 + $6.70).

1. The pool does not cap oil, so need to adjust for loads over 44.5%.

2. The pool is not a fixed price, adjust for risk of up/down moves in pool prices.

e. When choosing what contract to deliver make sure you consider:

i. Quality terms

ii. Payment terms

iii. Receival, grain assessment fee and GST structure

iv. Delivery location (Silo, port, FOB).

v. Credit/Payment risk

vi. Market movement risk

Summary of equivalents based on a $350 Louis Dreyfus Port price:

Katanning Silo Price	Louis Dreyfus Port Equivalent	Agracorp Port Equivalent	Pool FOB Equivalent
$348.62	$350	$361.50	$377.30
+ $11.50 fees - freight		+$11.50 fees	+$20.60 fees +$6.70 int.

2004/05 Canola Pool interest Calculation (basis 8%, Nov Harvest):

Payments	$260	$10	$18	$35	$22 est.	$345
Date	Nov	March	Sep	Dec	Feb est.
Months interest	0	4	10	13	15
Interest incurred	0	$0.27	$1.20	$3.03	$2.20	$6.70