Why would a farmer store there canola this winter.

[HappyFarmer]

I hate taking the risk of storing canola all winter. Some went in the bin hot and a little on the green side so lots of risk IMO.
This is what we are are going to do.
Bunge has a 10 under Nov12 for October delivery canola. Nov12 to March13 carry is only 2.4/mt making my basis -12.4 off March13 futures. I can go all the way out till July and gain $13.9/mt making my basis a 3.9 off July.

So basically we can haul in 1500 mt of canola in October, 750 mt we have until the end of Feb to price @ -12.4 off March13 futures and 750 mt @ 3.9/mt off July13 futures. I can price it at any time throughout the winter , don't have to check bins, move grain around, don't have to try and start cold augers.
I can price it and have cash in my had the same day i price it.

IMO this is no brainer. Why would i keep it in the bin all winter?

[SASKFARMER3]

Well we have had canola store for 3 years or
more. Not a big deal unless you have 1O0 s of
thousands of bushels to baby sit. But selling today
is welcome to the great grain Robery of 2012.

[charliep]

You have the alternative of selling physical/cash canola this fall and replacing with a long futures position or a call option. Basis levels look pretty good but I am not sure that there won't be some slow delvery periods that see positive basis.

You are in a weird situation on the options strategy where you hope the market gets beat on more (prices over react to the downside) with the hope of getting some higher valued strike prices on the call at decent premiums. Lots of volatility so your calls are likely to be relatively expensive. The advantage of calls are you know the cost/investment versus long futures where you are exposed if the market moves against you. Both work. Just need a strategy.

[kato]

It's a 108 page report. This is going to take a while.

[Partners]

All of our canola is in air bins , and after the last few cold nights its good to stay..Also have opi cables in each..Hauling now will keep there supply coming even as the price falls..But what ever you wish to do...

[grassfarmer]

Saw the article in Alberta News today. Looks to me
like its a lot of hot air about nothing. How can we
change the industry when we have 2 packers doing
90% of the kill and having no interest in doing
anything other than shipping commodity beef into
the US. With their captive supply arrangements and
no competition in the marketplace they will always be
able to buy Canadian cattle cheap enough to make a
margin.
No-one else will build a new plant of any size - why
would they? We are in a corner and there is no easy
way out for the bulk of the commodity beef industry.

[burnt]

Hey Randall, did you see this? It sounds to me like them dang 'Mercuns are buying up our cheap beef and using it to leverage their own supply for export!

They couldn't be, could they?

[Choice2U]

Happyfarmer...you have eliminated the storage risk, locked in your basis and can price anytime. First risk - futures do not move up (eg. world turmoil) and crushers can't get grain as tight supply so they move to a positive basis. Minor risk in my books. Second risk - prices actually continue to drop over the whole year and you have never really get a good opportunity to price and end up with a lower amount than selling say versus 3 weeks ago. I'm bullish like you so I think this is sound strategy to take advantage of any price rise. I am waiting for the present price to continue to drop like a rock because I sold most of my canola off the combine. Like Charlie says, once I can buy a cheap call in the 600/Mt. range, I will be back in the market to capture a price rise as I am also bullish.

[HappyFarmer]

Choice and charlie,
I agree, know I am eliminating some of
my risk but still know I am carrying
bulk yet.I had canola heat on me for
reasons that I still don't know to this
day. Since then a lot more cautious. I
like the options strategy. I don't plan
on waiting too long to price some of it.
Just like you choice sold a bunch off
the combine in feb and just cashed my
540 calls in on monday. One of my buddys
was telling about the margin calls he
was getting today. Futures are too rich
for me.

I'm. Not trying to be a smart ass and
try and make everyone think the this is
the right thing to do. I have no
problems with people who store it, I'm
simply sharing what I am doing.

Oh ya and saskfarmer, I'd like to use
your crystal ball when you are done with
it! If you call robery locking in a
basis you are sure one greedy SOB!

[Choice2U]

Given this is a marketing thread, what each of us do helps others decide on what is the best course for their farm. No two farms are the same and what works for me or you could be totally different but it is nice to know and learn what and how others operate. My only concern with options is that one needs major drops or market rises such as the one we're going through right now to make any significant money. I have been wrong on 80% of my decisions playing with smaller dollars but am up 60% in dollars. I also use them mainly to protect the downside because I cannot afford to be wrong when prices are good and I hold.

[furrowtickler]

All canola should have been sold 3 weeks ago, that was the high we may not see again till next summer IMO. The size of the canola crop is meaningless on the world stage. Anyone notice the huge silver melt down - cotton did. That and other global financial issues could slam crops prices down and make some producers piss their pants - remember '08??

[rkaiser]

Collaboration,focus on strategy,value chain? What are these words doing in an article about the commodity called Canadian Beef? LOL

This is typical of the kool aid poured at an ABP meeting. Yes those same ABP/CCA folks who I fully expect to jump to the defense of the XL boys and maybe even try to get them some federal assistance. While Cargill jumps for joy at the price drop for fed and non fed butcher cattle. Whoopee. Insurance will pay for the recalled shit dumped in the ditch and even the NIL bros will now have to pay less for non owned cattle. Have not noticed a huge discount for trim in Calgary yet... Typical commodity game.

Beef is food people and not a commodity the way it is treated by most everyone in this industry. Until we all take a little more responsibility for supplying the consumer with a healthy nutritious meal rather than simply going through the motions to "make some money", we will never see any change.

Yes real beef chains are needed and participation is key from grassroots to retail. Including a plant gaucho (poke)Almost impossible in the current system.

Time to "care" about what we are doing. The consumer likes the word and the feeling, and will even "pay" for it.

"We" are allowing it. "We" are feeding this screwed up system as long as "we" grow cattle and sell them to any buyer who feeds this commodity bull shit chain.

I have to say "we" cause I chose to sell a few cull bulls to Lakeside this summer as well. Got a price from the buyer and collected 20 cents a pound less when the cheque came... Just because. LOL I keep swearing I will never deal with this system again and had to do it "one more time" to prove to myself what a fool I can be,,, LOL

Someone is gonna wake up and see the merit in our executive summary and business plan soon and all of this will be healed...LOL Okay - the first part of that statement is real, the healing is gonna take years.

By the way - to all the NB sympathisers out there. I would never have wished for something this horrible to happen, especially since we all know who will pay the ultimate price in the end anyway... All except maybe those damn insurance premium increases..LOL