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    #11
    You are right. The conversation should be about whether $12/bu is a good place to lock in new crop.

    A conference call this past week highlighted the strange difference in fundamentals between old and new
    crop corn/soybean. US corn is extremely tight old crop carryover but supplies look adequate to surplus
    new crop. Soybeans supplies are adequate old crop (yes even with the problems in South America) but
    have potential to be tight new crop. The USDA seeding intentions report will be an important one and
    from there actual seeded acres. Looks like an early start to seeding in the US as well which will favor corn.
    Note the inverse in corn futures.

    [URL="http://www.farms.com/markets/?page=quote&sym=ZCK12&mode=i"]CBOT Corn Futures[/URL]

    Comment


      #12
      Just read Weber's canola buddy. One interesting comment was about rationing happening sooner than later or we will be on fumes by mid June.

      How do you ration something that is not there???

      I have talked to alot of farmers that their bins are empty or at the least, priced.

      Comment


        #13
        And if rationing doesn't take place that will eventually lead to a shortfall in mid august while they are waiting for new crop.

        So if they are forced to shut down plants it gets more expensive than buying 15 buck canola.

        Comment


          #14
          You may be right. If you want to be a speculator, get
          long futures. Only 10 % down and you're in the
          game. You will learn very fast about the impact of
          leverage if you haven't already.

          How far can canola prices get of line with soybean oil?
          What impact will $15/bu canola have on canola acres?
          Realize everyone will play the weather trump card but
          $13/bu new crop canola will push everyone to take
          risk they won't other wise. An early spring will likely
          see August delivery (other things equal).

          At this point, my recommendations are not based on
          the idea I can forecast the future. They are based on
          the idea I can't forecast the future and am taking
          some steps to manage my price risk (protect against
          pain but give up gain). Old crop conversation is
          simply an arguement about who is the best
          speculator.

          The markets function is to put buyers and sellers
          together to trade physical supplies so farmers can
          pay bills and crushers can keep their plants busy
          meeting the needs of consumers. The market has
          preformed very well when you look at volume of
          deliveries and record export/crush pace.

          Comment


            #15
            But what happens when the physical isn't there? Just because it says it is on paper doesn't make it true.

            Comment


              #16
              But maybe it is there since Saskfarmer3 was saying in another thread he was getting 10 bucks for heated canola

              Comment


                #17
                The strong pace of exports and crush are not new information. They are both factors in the $600/tonne canola futures and the current strong basis levels.

                Will western Canada run out of canola? Maybe but markets function is to make sure that doesn't happen. Historically, Statistics Canada has undersestimated canola production (suspect this year may be no different) with negative feed waste and dockage showing up on the unadjusted July 31 stocks report.

                Will canola hit $15/bu this spring? No idea but I won't bet on it. I would feel a lot more confident if soybeans/soyoil moved higher - particularly new crop. On that same theme, I would be watching the old/new crop canola spreads.

                Whatever your viewpoint, we are in for some interesting times ahead.

                Comment


                  #18
                  For what it is worth, CBT soybeans, CBT soybean meal and ICE canola futures all have an old/new crop inverse. CBT soybean oil is relatively flat at 55 to 56 cents/lb.

                  The economy and impact on vegetable oil in S.E. Asia as well as fuel demand/biodiesel consumption in Europe/North America are also unknowns. Lots of talk on Agriville on both these topics.

                  Comment


                    #19
                    expect more gains tomorrow, hottest march day ever in scotland today, 22.8c. Europe is burning up!

                    Comment


                      #20
                      Farmers are 100% leveraged when it comes to
                      marketing.

                      40 bushel canola x 3 dollar swings=120 dollar per
                      acre difference-OFF the top or off the bottom of the
                      bottom line.

                      THATS why the bantering and fighting and swearing
                      and kicking and screaming-here-are so important.

                      Comment

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