And the 2011 Canola Crop is in Excellent Shape!

[charliep]

For what it is worth smallguy but my experience is that farms with some financial stress (which is a code word for a normal younger farmer with bills to pay/loans due) when all costs (interest and storage) are included. Another weird comment is there is a lot less stress in a farm family business when they are executing on a marketing plan based on their operations financial needs. Opens up more time to be spent in the business where there is real money to be made - agronomics and production.

[charliep]

Way off the topic but canola is the most interesting market to me. I tend to concentrate on the consumption side (sorry SK3) but somehow the market has functioned to meet buyer needs (export and domestic crush) of about 250,000 tonnes/week (1 mln tonnes/month if that is easier) without a hiccup and allow both smallguy and T.N.T. to market their crop as wish based on their business needs.

To the original topic, acreage will be interesting. Yield even more interesting. Suspect in the range at this point of 12 to 14 mln tonnes with demand for the full crop at either end of this spectrum. The increase in price from a smaller crop will not pay the pain of less to sell. As people have highlighted in the past, the issue will be winners (get a crop that can be sold for a better price) and loosers (small crop to sell).

[hedgehog]

farmer near here like tnt, told us all he had 09 wheat in shed still in aug 10.
when he started emptying it, discovered that roof had been leaking all year. . possibly 100 ton lost from 1,000. only found out cos i rocked up at the wrong monment.
fortuneately, and obviously, he has deep pockets and a rich wife.

[BTOfarmallll]

Cost of carrying grain = $0.00, no matter what. Better worry about real costs there Char.......

[charliep]

Will leave for discussion.

A weird economist view but nobody here has grain in the bin. Everyone who has inventory is storing cash (read dollar bills). Will storing dollar bills as grain provide the best return on money relative to the other places this money could be used/invested? At what risk?

Given what is going on with weather these days, old crop inventory may be a good investment.

[JDGreen]

Charlie whether it makes sense or not, I have
never regretted grain on hand. Canola is off to
best start ever in this area with acres doubled in
the region. Not that this makes up for what is
lost or hasnt been seeded as sf3 states

[charliep]

Not disagreeing. Storage is valid strategy but everyone will make a different decision based on their financial and risk management needs/overall plan.

Left some words out of one sentence where I meant to say that sometimes younger farmers who are more cash make better marketing decisions than bettered healed farmers. They have to given this is a relatively low cost way to improve revenue/manage their risk. Bad analogy but pulling a minimum till seeder with a tractor that is over powered is easier than trying to pull the same unit with a underpowered tractor - more leaway for error. A strong balance sheet can provide a lot more alternatives for marketing such as storage but it may not lead to better marketing.

[farmaholic]

Amen Charlie

"A strong balance sheet can provide a lot more alternatives for marketing such as storage but it may not lead to better marketing."

[charliep]

What perked my interest on T.N.T. posting was the price ($13.58/bu) which if my math is right is a zero basis and my favorite delivery words - picked up in the yard. Best price of the year - no idea. Would have my interest if nothing else to lock in the basis.

bucket - Canola seeded acres last year was about 16.8 mln acres with about 16 mln acres harvested. Average yield 32.5 bu/acre. Production 11.9 MMT. Disappearance about 13 MMT. Carryover - 1 MMT ish. Need to produce at least 13 MMT again this year.

[hedgehog]

a strong balance sheet will always lead to better marketing, as harvest sales can be avoided, and pressure to forward sell from banks also avoided.
a strong balance sheet can lead to lots of things besides poor marketing,like horse racing, and womanising, to name but two.