Canola this A.M.

[charliep]

This week's grain statistics weekly. Deliveries 11.25 MMT versus 8.8 MMT last year and a 14 MMT crop. Week 34 so 18 weeks remaining in the crop year.

[URL="http://www.grainscanada.gc.ca/statistics-statistiques/gsw-shg/2011-12/week-semaine-34/gsw-shg-01-eng.htm"]Week 34[/URL]

[SASKFARMER3]

Charlie I think your going to be surprised. The
bins are empty.
Or they will shortly.
Here is some news, seems some crushers in
Yorkton might have a summer holiday for staff.
Hm yea their is lots of canola in the bins.

[mcfarms]

With a very strong local basis can sell July Canola @ 14.47 as of now oink oink oink.

[charliep]

Extremely strong close today. Also can read the numbers and look at the charts just like everyone else. In some sense (will get killed) I would like to see a correction and the makings of another leg higher. We are in for some interesting times. Fun to be talking about markets versus other things.

[fjlip]

"Deliveries 11.25 MMT", and priced still to deliver.
I'd say not much left unpriced.
Same thing happened in the 80's when canola hit $16.
Bins were all emptied for $6-8.

[charliep]

Similar to certain medications advertised on TV that warn about firmness that lasts for more than 4 hours, I always worry about markets that are going close to straight up. Demand destruction/buyers shifting to other commodities and signals to grow a lot more (realizing Mother Nature has to cooperate).

[fjlip]

"Deliveries 11.25 MMT", and priced still to deliver.
I'd say not much left unpriced.
Same thing happened in the 80's when canola hit $16.
Bins were all emptied for $6-8.

[charliep]

Similar to certain medications advertised on TV that warn about firmness that lasts for more than 4 hours, I always worry about markets that are going close to straight up. Demand destruction/buyers shifting to other commodities and signals to grow a lot more (realizing Mother Nature has to cooperate).

[errolanderson]

For those scaling in fall floor price
protection over and above DDC contracts,
this rally continues to offer higher 'n
higher canola floor prices.

Nov canola $550 puts today traded for
$18/MT today, Nov $560 put @ $23.50 and
Nov $570 puts @ $27.50/MT

If rally continues on Monday, Nov $570
puts may trade for $25. Example: $570
strike - $25 premium = $545/MT
plus or minus your fall delivered basis.

Errol

[wd9]

Errol, what is gonna be the cash price for
canola next year this time?

[errolanderson]

wd9 . . Have no idea where canola will
be next year at this time. My sense of
the market now is commodity fund buying
is ruling 'king' right now.

There is a wall of money that has
shifted from the Dot.com (2000 era) then
went bust, then flowed into the subprime
mortgage fiasco (remember Phoenix houses
for interest only mortgages in 2005)
then went bust, then the money flowed
into commodities.

To me, this is why we are witnessing
these crazed market swings over the past
5 or so years, funds in, funds out.

Here'e an opinion (and throw it out with
the wash) . . . . $14/bu soybeans don't
have a long shelflife. Maybe beans will
explode toward $16/bu on fund buying,
but that would last about as long as a
Calgary Flames winning streak.

Cash canola prices may swing between a
possible low of $10/bu to possible high
$15/bu if the beans go nuts in the
nearterm. This is a blow-off top, but
where's the top?

Sunday . . . China will announce if they
will increase interest rates or not.
This will impact canola Monday morning.
Stock markets will be real happy Monday
or possibly real sad.

Big canola price swings seen ahead.

Errol

[fjlip]

And new crop after June, weather will be a constant driver, up or down if stocks of soy-canola are so low.
A less than ideal yield would be wild prices, IMHO.
Hope the prairies get a descent crop and no crazy weather.

[cottonpicken]

The nagging thing in my head about beans/canola is
that they didn't previously spike high enough.

Corn wheat oil made themselves more reasonable
trading ranges.