And the Slaughter continues!

[SASKFARMER3]

Well aren't funds and speculators fun!
are we all having fun yet. China takes a
week holiday and the shit hits the fan.
Simple marketing what has changed the
answer is not a fu$%ing thing. Canada
has shit Australia froze the USA cant
pull a crop out of its ass this time and
the world is hopping no praying that
Brazil and Argentina will grow a crop by
march.
Ah what a wonderful world.
Buying inputs for next year is not going
to take place. Growing canola at today
costs is putting the crop in negative
territory.
Why would USA farmers pump up fertilizer
use next year if they didn't use what
was put in ground this year. Do you
remember the 80s in a drought the
fertilizer doesn't leach. So again why
pump fertilizer use. Nice marketing fert
companies.
Simple crop plan for 2012.
Oats 3300 acres at 50lbs fert and some
phos.
Peas 1300 acres no fert and still have
enough pursuit from USA for twice that
acreage.
2700 acres HRS soil tests say didn't use
as much as we thought so cut back. Who
cares if we grow a crop or not.
2700 acres Canola min inputs go for a 25
since that's all these new varieties can
do.
Cuts to cost per acre. Total
$435,000.00. or 43.50 an acre.
Fert chem (chem back to lower rates)

[SASKFARMER3]

Oh one other thing. The Bins are locked
now till Jan-March have a great winter.

[SASKFARMER3]

Like Charlie says a good plan and enjoy.
$750,000. In canola peas and hrs. The fall crash
happens every year, just a little later this year.

[charliep]

With price declines come opportunities. I would look at a call strategy. Expensive when I look. If you had a willingness to spend $16/tonne (a number out of the air), that would give you a look at a $700 strike price off the January and $770 off the March. The idea is to have a lottery ticket in your pocket and/or something that gives you the discipline/backing to make a decision. As an example, say canola does bounce to $700/tone. Your ideas are now $900/tonne. The option allows you to sell at the $700/tonne futures price and use the call to participate in any rally to $900.

Lots of tools in the tool. Just need a strategy.

[SASKFARMER3]

Yes that's the idea, take your profit. Cover your
costs and then enjoy, crushing plants don't like
winter shut downs when they run out of product.
Similar Cargill makes money moving grain, when
their short cover.

[TOM4CWB]

SF3,

Telling other people to stand in front of a speeding loaded freight train... will not reduce the road kill.

A plan... like we were doing months ago... BUYING $620 puts when the market was $645... was insurance ANYONE could have bought.

NO trading account required.

This more should have been as expected as fall weather cooling down in western Canada. US beans are better than expected in yeild... which brought UP canola prices.

Hence the need for risk MANAGEMENT!!!

NOT a loto ticket... Charlie! 9999 out of 10,000 they just cost and do not return anything!

VOLITLITY will become greater as time passes... NOT LESS!!!

Cheers!

[SASKFARMER3]

Tom yes risk manage,I don't need sales till march,
so I did my sales for fall and sold what I needed.
But if your on a short leash you have very little
room to move. Over paying for rent land and
inputs puts you their. Why fall for the food
shortage BS. We have to produce more or people
will starve, oh cry me a river. What about me the
farmer for once. How many cattle men are up shit
creek since xl had problems, will the meat recall
hurt them no their stll buying cattle but now at .15
cents a lb less, one buyer really sucks.

[boarderbloke]

I've seen this story before,,,
When raising the price offered, to get grain from the grasp of firm hands fails, the next approach is to lower prices offered.

[hobbyfrmr]

I fully agree with border. Excellent strategy, when
seller resists, drop the bid and watch the grain
flow in. The oldest trick in the book and it still
works on some farmers!

[charliep]

Just curious how everyone makes a sell decision. If you are trader (read speculator), the way you play a market is to follow a rising market up but run a trailing stop that will price out on a dip. Farmers don't call it this but many use this same technique on the cash side.

You can also have price targets. You can pick certain times of the year to price. You can separate basis and cash pricing. Multiple techniques.

[TOM4CWB]

Dear Charlie,

As always Cost of Production is a good first step to decide where to base our price on. Then we add spec value and probabilities that prices will increase.

This year:
The inverse in the futures values really pushed us/me to price sooner rather than later. A zero basis on July to me is not attractive when the July futures was $15/t below Mar 2013.

What are the chances of getting back to back failures in Soy???

Will there be a squeeze on Canola prices in the spring of 2013?

90 percent chance there will be.

Soooo... what level do they start from...??? How many customers have bought ahead... and are exempt from needing to be a part of that squeeze?

Interesting times ahead!

Cheers!

[charliep]

The market will remain interesting. As most have said here, volatility will be the name of the game and a sign of a healthy market. Signals from things like basis in the case of canola will also warrant watching.

When I was a wet behind behind the ears pup, I made the mistake of complaining about price volatility in a price rally to a mentor. His comment was you mean you like low prices? Low prices go hand in hand with big supplies/low price volatility. Tighter supplies means buys and sellers fight more over the final price - thus more volatility. So I would argue volatility is a good thing. So farmers just have to use it to their advantage with the caveat not everything they do will be a winner on each individual sale.

[charliep]

A new world with the Camrose crushing plant pushing potential domestic crush capacity to over 8 and likely over 8.5 MMT including the improvements in other plants.

A weird comment that the best canola prices have come in the years of large supplies when product was consistently delivered to the market over the entire year and the system was effectively vacuumed clean by sales activities. The worst years were ones with tighter supplies when slow deliveries limited what could be sold and carryovers were larger than expected.

The decision to sell or not sell is an individual manager decision and as has been communicated on Agriville, varies farm to farm. To get me excited about canola, I would like to see something better than 51 cent per pound soybean oil futures.

[gregpet]

Wow, from zero peas to 1300 ac now. Better wait since I'm sure your plans will change a few times from now till spring and we will all hear about it. Oh and how lazy I was for not planting early into mud like you decided to do. Now I reap the rewards of my laziness of my management decision not to plant into mud no matter how late it got.

[farmaholic]

Thinking out loud, thinking out loud opens your thoughts to criticism.