Psst . . . New Crop Canola Top Holds

[errolanderson]

November canola continues to respect its
contract high seen around April 10th.

IMO, for new crop cash canola bids to
surge further, this market needs fresh
bullish news to recharge the batteries.

On the downside, a sell-off could drop
these fall cash bids quickly . . . but
this may still be premature until
eastern Saskatchewan seeders hit fields
more aggressively and production comfort
level improves.

Note: Nov canola $570 puts traded at
$16.50/MT this morning.
Strike $570 - Premium $16.50 =
$553.50/MT ($12.55/bu) plus or minus
your fall delivered basis.

Errol

[bucket]

Errol

Not too many drills will be moving until next week around here. Push canola flowering into a normal July and hit it with 100 degree F heat wave.

Think that would be a market mover?

I am not a chart guy, but running three perfect years for canola production is a bet I am not willing to take on.

[errolanderson]

bucket . . . it certainly could be. Your
weather is watched by many right now.

The drop in wheat today may factor into
canola by late day . . . we'll see.

[bucket]

Rain makes grain but the grain has to be in the ground first.

Its great for those south of the border as their planting is well ahead. And really, its the US that sets the price, but a cooler weather pattern could slow things up to the point that they are going to take another round of trying to sweep out the bins.

[Wheatking]

Just did some charting and i wont be selling
until it breaks the upward trendline at approx
580, so not much room to go down but has held
well. Here is a link to the chart I just made
up, not much analysis but it shows the trend
well.

One a side note anyone know what the hell
happened to dec wheat, the bottom fell out
yesterday, I would thought with this delayed
seeding it would be going up.
http://www.screencast.com/users/Wheatking/folders
/May%202/media/00858ccb-cd80-4019-86f7-
a6fcace7b5ff

[errolanderson]

Wheatking . . . believe you are right
with your charting lines. Canola has
gone up so quickly that it will take a
solid drop to break the uptrend line.

Wheat . . . funds appeared to bail wheat
and corn today due to the strong start
to the U.S. crops. Maybe someone else
that knows more about this drop can add.
Wheat drop was large enough to even
affect hogs and cattle today.

PS: New crop canola is one solid
soldier. Given all the turmoil today and
canola stood up and held its own like a
rock. An amazing market.

[bucket]

"Big liquidation today that picked up late in the session. The CME sent out an alert late this morning that will apparently
require non-hedgers/local traders to margin trades exactly like a common speculator. In the past, these locals or seat owners
have been able to trade on lower margin. The really bad part is that this change would take effect May 7 – next Monday!!!
This news really spooked the market and gave many longs a reason to get out of their positions. ............
“This is a travesty – the Merc should be hung up by their toenails on this one!” ................. in the history of the
Chicago Board of Trade there has never been such an announcement made that would go into effect in such a short period of
time"

[malleefarmer]

was the wheat close lowest since september 09? dec wheat

[errolanderson]

Factors we are waking up to this
morning.

China appears to be slowing their
soybean purchases. Crushers apparently
are shifting toward their internal
reserves.

Malaysian palm oil was hard hit
overnight, down about 2.5%. Slowing
China economy appears to be depressing
the Malaysian palm market.

Errol

[charliep]

Malleefarmer

We are testing the lows over the past 2
years but still above the 2009 levels.
Would post the graphs but still don't
know how on my playbook. Wheat is a
different market than oilseeds. Not much
food for bull's here

[errolanderson]

malleefarmer . . . apparently Chicago
wheat did experienced the lowest close
since September 14th, 2009.

bucket . . . the exchanges move their
margin requirements on products all the
time depending on risk and volatility.
If volatility increases, margins have to
rise to cover added risk.

[LWeber]

Floor traders not being able to use their CBOT seat value as margin requirements is a huge change...more than just margin changes...

Last seat sold at the CME for $642,500.

As well, they will be margined at spec rates and not hedge rates...

Changing the rules that drastically while contracts have open interest is bullshit...

[errolanderson]

What's up with the exchange? Does this
suggest that the value of the seat will
start to drop ?

[LWeber]

With ICE's new programs possibly cutting into CME contract volume - seats are bound to take a hit.

I wonder who the Rhodes Scholar was that took away the seat margin value - effectively putting a value of the seat at ZERO!!

Trading 22 hours a day is going to change price discovery - not that price discovery is even thought of any more.

Volume - churn - burn - repeat next day.