Canola Wow!

[errolanderson]

Good morning all . . . .

Canola is making another powerful move
higher this morning (Friday). May
contract breaking above $555/MT. If it
holds into close, may signal another leg
higher yet.

This is wonderful news for growers.
Appears a lot of spec money is entering
canola and our dryness and South
American production concerns are
contributing.

Of note: Nov $520 puts may trade for $24
Nov $500 puts may trade for $15. These
puts will offer growers between $11 to
$11.25/bu fall floor price minus your
delivered basis.

Don't know where the top of this bull
move is right now, as this run has
surpassed our expectations.

Errol

[Kodiak]

What do you make of the spreads? Looks like the market is more concerned about old crop stocks than new crop production. $28 inverse.....

[bucket]

Would it be wise to take an $11.25 September delivery contract on some bushels at this time?

[silverback]

As a very old guy who is certainly no expert, I just gotta ask, with all due respect to you and other analysts, how is it that you were calling for this market to drop just a few weeks and $60 or $70 dollars/tonne ago?.

What has changed in that time? or is it actually just impossible to forsee such a run in value?

ps I am trying to be nice because I do value your opinions greatly.

[agstar77]

And just days ago you were doom and gloom.

[lesm]

In all respect for Errol,nobody can predict anything in todays world. The erratic weather and the world economy make the best forcasters look like amateurs. Sometimes the market will reward the extreme gamblers(myself included) and punish us for being too gready. The euphoria I get from watching these markets exceed any downside that will come later on. Now I can double my pleasure by watching the wheat markets!

[errolanderson]

Silverback . . . you are so right.

We did call this market to drop on the
assumption that that U.S. economy was in
contraction. Nothing but good U.S.
economic data coming out right now and
that has given markets a lot of
confidence. (didn't see that comin)
Stock markets continue to rollup.

You are lot more an expect than you give
yourself credit for.

From a humbled Errol . . . .

[highwayman]

Eroll, do you see this run in Canola and better economic prospects pulling up other markets such as pulses? Seeded intentions in the pulse spectrum seem to be dropping every day in our little part of the world yet not a lot of strength in nearby bids or newcrop for that matter.

[cottonpicken]

I don't think we can breach 750 on this run,650-700
reasonable enough target with a pause a 600.

36 months out we could be shooting at 1100.

[errolanderson]

Highwayman . . . yes to your question.
Pulse prices will also get life through
this commodity rally.

Guys . . . this is what's buggin me in
the middle of the nite. There is the
other side of the market. What we are
witnessing is aggressive fund buying (in
other words, heavy spec buying in
markets). Bernanke's freshly printed
money that has been on the sidelines is
now actively entering market because
traders feel more confident in the U.S.
economy ie: canola and feeder cattle.

When this money hits, markets roar. But
. . . when the funds eventually bail,
all heck will break loss. That's why I
placed cautionary notes on agriville of
a pending sell-off. That day of
reckoning will happen. In the meantime,
fund money is a like a locomotive
running over the sellers.

I truly believe this is a wonderful
pricing opportunity for growers for cash
sales. But if your price, it's murphys
law, the market will go higher. But at
least you'll be priced before the market
eventually takes a tumble.

For what this opinion is worth . . .

Errol