canadian canola

[fjlip]

Great comments, even IF farmers are worth millions, the rest of the chain sees us as price takers and manipulate our returns and cost as much as possible. Tough to prove but if it quacks like a duck....

[ado089]

I have 500mt but was sold a long time ago to be picked up next week.

[SASKFARMER3]

Charlie the bins are empty dah! The lower basis has been taking everything. Crushers are empty! The big yield was a little bit exaggerated! Farmers started with the yield monitor is showing 80 then the grain companies and advisor groups continues the yields and like all good lines added more so monitor that maybe had 55 now is 90!
Bins are empty!

[charliep]

We'll see in another month.

Interesting the US is doing their own rejigging of numbers. It would appear they under estimated the 2013 soybean. That number will become more apparent in August and in their next stocks report.

[charliep]

If you guys are so certain about the carryover, why weren't you selling futures this past winter when July futures gave you a sniff at $500/tonne and making cash sales today when basis levels have narrowed?

[Braveheart]

Charlie, great point. The answer to that question will vary farm to farm.

For our farm, about on par with Freewheats farm size, cash is just not abundant enough to feel comfortable with today's margin requirements. Futures can be more volatile than when we used to hedge with futures in the '90's. Limits can expand quickly and thusly margin calls.

Also, production is riskier with the weather extremes these days.

Forward cash contracts have had to do for now.

[SASKFARMER3]

Charlie cash sales were done at 500! Gee you think were all stupid farmers don't you! I'm telling you the bins are empty surprise surprise!

[charliep]

John DePape hasn't posted for a while but the whole concept of his program was a combination of using carry in the market and basis signals.

I looked at ACPC price charts and canola cash prices have remained relatively flat for old. The change has been declining futures prices reflected the overall world oilseed situation and stronger basis levels reflecting reduced delivery pressure.

I don't know that I would have done anything differently than what guys have done here. As an education/market skill development thing, I do look back and ask myself what I would have done differently. Not about beating up on myself for decisions but trying to use experience to improve.

[Braveheart]

Also Charlie, the carryover wasn't evident last winter. It is coming to light now though. Bins are swept clean around here.

Basis levels might be an indicator. $10 over, Aug delivery has strengthened to $15 over.

[charliep]

The offense goes the other way as well. The market experts (who ever they are) are not that stupid as well. Most will show their logic in their recommendations and thoughts.

To make things fun, lets make this a bet. I will bet you the canola carryover on are more than 2 MMT.

You willing to take the other side?

[Braveheart]

Who would ever verify? Statscan? Ha! AB Ag? My friend there Nithi G. still working?

If Iost a bet on canola carry out it would put me at a loss on canola this year. That's how tight the canola budget is.

[SASKFARMER3]

Charlie you miss the point if a lie started last fall we, you every one added to the BS told the whole world we produced so much! I would t pay shit aLl to a Canadian company for product! Then the railways shipped oil and screwed every one!
We have a shit system in the greatest country in the world ! Ha ha!
Point on your bet farmers thiNk all these farm experts that publish reports or stats can are full of shit! Soy paid good all winter did drop off because USA farmer and SA were going to seed wall to wall! Face it the experts blew the yield on 2013 crop! Bins are empty or are all the expert marketers that had big crops fooled us on all their big dollar sales and are sitting on grain in the bin! Bins are empty it's rather simple!

[charliep]

Canola should be an easy number to verify eventually because every kernel is delivered to a CGC licensed facility. The farmer surveyed numbers are production and on farm stocks.

So here is what I know to week 50 from CGC grain statistics weekly.

Deliveries to July 14 - 15 MMT. I suspect this could grow closer to 16 MMT by July 31.

COPA crush to July 31 - 7 MMT.

Exports to week 50 8.5 MMT. Suspect could grow to a record 9 MMT in week 52.

Commercial stocks on July 14 - 840,000 tonnes. That compares to 408,000 tonnes on July 31, 2013.

If you leave commercial stocks at 840,000 week 52 and you assume 500,000 dockage, that leaves July 31 on farm stocks at 1.5 MMT or total canola carryover at 2.3 MMT. If Statistics Canada overestimated 2013, you will see a smaller on farm carryover/big dockage number.

Those are the numbers I am looking at. Canola is relatively straight. Wheat and barley more complex.

[charliep]

SK3

So you are not confident enough in what you say to take the bet? The July 31 stocks report will be the final arbitrator.

[charliep]

Hedgehog

To your original post, I suspect that your buyers are feeding you a bit of crap. After the smoke all clears, Canada has been agressively selling canola to make a 9 MMT export program. A 2.3 MMT carryover (subject to whatever Statistics Canada publishs) is a stocks use ratio of 14 percent or just under 2 months supply. Both our problems revolve around weak world vegetable oil prices and bigger South American/potential US soybean crops.

A bright spot for canola is the high energy prices (which could go higher depending on geo political issues). A comment I have seen is 35 cent per pound soybean oil can work as bio diesel on its own in a world of $100/barrel crude. If I were to pick on wild card today that would make me more optismitic about canola prices, this would be it.