Canola staying strong

[furrowtickler]

I am surprised at the strength of canola with all elevator points plugged with tough canola to dry. Most of this canola is being forced into the market regardless of price and yes, the basis has widened but a steady rally continues. How long will this last? How long will fund money continue too prop up markets? Deputer(sp?), says Jan - Any thoughts, charllie, Larry, cotton?

[mbratrud]

Alot of the Canola going into the pipeline is being done on basis. I imagine when everyone decides to price, things will level out. Jan $415 - $420 less a $20 - $25 basis gets $9/bus.. I think there will be lots of resistance there in the Jan and then a lull from the middle of Dec until the New Year. By then maybe some weather news out of South America to either fuek or douse the fire.

Others Thoughts?

[mbratrud]

Another wildcard in this Market could be if the Riders win on Sunday the beer consumption will be so high. Barley futures will soar, Malt companies will be begging for new selections. And somehow that has to help Canola to.... not to often Canola rides on the shirt tails of Barley Futures but theres a first time for everything Go Riders Go

[SASKFARMER3]

Local terminal went to 50 plus drying that's now a $1.50 Stealing. 60 miles away terminal with no dryer 26. that's .58 cents and is reasonable. Just love this BS. Next will be mold or some other BS story.

[mbratrud]

SF3 if you are drying your own seed LDM Lloyd is your best bet by far.

[mbratrud]

Make that LDM Yorkton Sorry. (So used to referring to ADM Lloyd)

[cottonpicken]

The reason its staying strong has nothing to do with supply and demand.

http://charts3.barchart.com/chart.asp?sym=DXZ9&data=A&jav=adv&vol=Y&divd=Y&evn t=adv&grid=Y&code=BSTK&org=stk&fix=


http://charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&divd=Y&org=stk&sym= DXZ9&data=H&code=BSTK&evnt=adv


http://charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&divd=Y&org=stk&sym= ZNZ9&data=H&code=BSTK&evnt=adv


http://charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&divd=Y&org=stk&sym= GCZ9&data=H&code=BSTK&evnt=adv



Tough to say when we start to challenge new highs but ill put my money on when the usdx challeges 67 on its down trend channel.
That would be as good a time as any to sell,sell,sell.Why?because thats the next short term bear market rally in the dollar.

[cottonpicken]

Should note an all out run on the dollar is possible but not likley.

Mainly because gold use to back the dollar but now the u.s military backs it.

[mbratrud]

CP I would agree with you that a weak Us dollar index is going to help commodity futures. I hope your right we need some good pricing oportunities for new crop.

[charliep]

furrowtickler

Likely agree on the timing of better prices although I might extend a bit into February.

Would be watching the statcan canola production estimate carefully. Likely 11 MMT ish but needs to happen. From there, it will be the demand side. New crushing capacity versus ability to run all plants full out (impact salmonella to US on plant operations) will need to be watched - crush lagging to date. Also canola export pace. Canola exports to Nov. 22 (week 16) 2.3 MMT. Similar pace last year. 3.2 MMT over next 36 weeks to achieve 5.5 MMT total exports (mine and others number).

Also need to watch the US soybean complex. US soybean exports running at a super quick pace as buyers replace what they normally would have bought of South America with US supplies. This will continue until more is known about the size of the 2009 south american crop (seeded now - harvested Feb to June). Weather important but will be an area of caution next spring as Brazil/Argentina get more aggressive to sell crop. Then we are into the soybean corn acreage war in the US and then summer 2010 weather.

All this seems to be supported by an oilseed (oil and meal) that seems to be purculating along quite nicely. Will also be impacted by the energy. Not forecasting but interesting to remember that $140/barrel crude oil corresponded to 70 cent/lb soyoil and $7/bu corn.

[Hopperbin]

I just learned that the cargil specialty canola is 4 percent higher than normal oil content. Was told that is the norm for all canola varieties.

[furrowtickler]

Good insight from all, would be interesting to see if ADM and other crushers will start a pay scale for oil content on comercial canola. This is something they have directly benifited from for years with certain canola genetics. I for one feel they should but until they are forced to???? Some line companies are doing so in their own way for next year - JRI is for sure that is paying a slight premium for certain varieties. But then again they are trying to get back market share in the canola seed, fert and chem sales. It's all tied together - nothing is free there yet.