canola strategy

[cottonpicken]

"the inverse is gone its what they do"

And?

When somebody sets out to fleece a farmer/seller
they bid him into a trap of
backwardization(inverse),"they" understand the
situation.The sellers are blinded by basis.

"You'll take an inverse every time" ,not because you
can for simple logic of rolling it forward into futures
for the spread gain but underlying bull factors.

Don't worry i do it to,two sides to every
trade,someone has to burn.

Which brings me to an obvious question i don't know
the answer to,but you may.

If a major commercial is short,can/will they push a
market to inverse/backward and then with physical
backing navigate the options market to come out
positive?

[jdepape]

You ask: "the inverse is gone its what they do" And?
<b>In grain markets, inverses tend to correct themselves due to the cyclical nature of crop years. Or rather the market corrects the inverse.</b>

When somebody sets out to fleece a farmer/seller they bid him into a trap of Backwardization (inverse),"they" understand the situation. The sellers are blinded by basis.
<b>I don’t see an inverse as a trap, nor do I understand what you mean by “sellers are blinded by basis”. But I do know that inverses are not well understood in the farm community – so you are right – “they” understand the situation, and unfortunately many farmers don’t.</b>

"You'll take an inverse every time" ,not because you can for simple logic of rolling it forward into futures for the spread gain but underlying bull factors.
<b>Don’t misconstrue what I said – I said that if you want to hold inventory through an inverse, I’ll take the other side of that trade. In other words, if you want to own canola through a 70 over old-crop new-crop inverse, I’ll sell you canola now and buy it back later at a $70 premium to me. I'll do as much as you want and I'll do it all day long.
(I didn’t say I’d “take an inverse” – that doesn’t make sense to me)</b>

Don't worry i do it to, two sides to every trade, someone has to burn.
<b>I don’t agree that someone has to burn.</b>

Your question: “If a major commercial is short, can/will they push a market to inverse/backward and then with physical backing navigate the options market to come out positive?”
<b>If a single commercial is short and pushes the market to an inverse, he’s doing it – not on purpose – but to cover his short. If the market moves to an inverse because of him, it means the stocks in the system are light compared to overall demand, including his.
What do you mean by “physical backing”?
The only options play that I can think of in your scenario (if I understand it right) is to be long calls. But then he’s not really short, is he? If they are out of the money calls, as the market rallies, they eventually become in the money and counter the futures short. If he’s short cash, once the options strike gets hit, he can convert the options to futures and the futures to cash. So, yeah, he can own calls to provide some coverage, but it’s not perfect. </b>

[cottonpicken]

The whole purpose of a 70 buck spread is to entice
liquidation....no????

Basis-with the swings we have-is a worthless
barometer/measuring stick

Back in the doldrums,ok,fine come get the extra
pennies/cream.

In todays world with 100 shop rates and multi trillion
dollar deficits,40% monthly corn swings...

I think something/someone has to burn.

As far as the commercials,just doing some
hypothesizing,i've got other trades on and am trying
to figure out the life of a short covering rally,so thank
you i appreciate your comments.

[jdepape]

Lots to talk about but one comment caught my
eye - "basis is a lousy barometer".

If by barometer you mean an indicator of overall
market dynamics, I couldn't agree more. To me
basis is reflective of the supply/demand balance
IN THE PIPELINE and not the market in general.
Regardless of the total market dynamic, the basis
will do what it needs to do to service the pipeline.

[cottonpicken]

Your exactly right in a perfect world,but if i wanted
something to move at one end i would make it move
at the other first-you know what i mean- the basis is
then inverse in itself.

Not something that happens very often.

[BTO_farmall]

Any you Wannabee Dumb Farmers Coulda, Woulda, Shoulda Locked in a $5 Basis Late Winter off Nov., Aug. Delive, Thats What I did. Still currently letting this Bitch RUN, Got Lottsa Room to RUN yet. Ain't gonna Be No God Damn Grain Left in The Country. 30 Bu US Soybean Crop is a Disaster that looks more true Every Day, Its Comin Folks, And their ain't No Substitute. JeanDePape' - Ain't Own a Pot to Piss in, er' a Window to Throw it Outta!!!!!!!!!!!!!!!!