Nov canola

[BreadWinner]

To answer the question would you go long canola??? I'm already long canola, haven't contracted a bushel and about to fill the bins. Would I buy a put, nope it's Allready near bottom. Would I go double long (Texas hedge) and buy calls, nope that could be suicide. What you could do with canola not committed is watch for basis deals and sell spot price.

[charliep]

mbdog had a whole bunch of different scenarios.

Would you lift a short futures hedge now from last spring/bank the profits?

For new crop canola you had sold earlier, would you use a replacement strategy to capture potential upside? Same question for someone who had sold canola this spring at perhaps higher price levels (likely weaker basis) and was concerned that about a production failure/not having enough physical supplies to fill the contract?

What about someone who will have a production failure? They feel the market is undervalued and would like to replace their production volumes lost with a futures position.

Not recommending any of these ideas (a bolt of lightning would strike me down for even suggesting Texas hedging). Just highlighting again futures/options are a tool. What drives their use is the outcome a manager wants to achieve.

[macdon02]

Trend is down sell physical on any blip in basis, buy puts and short futures. $5 bean targets by commercials. The world is awash in veg oil. Sell some 15 physical while your at it. $9 for 15 canola sounds way better then $6. Market needs Brazil to cut back acres. Last thing I would do this year is buy bins. Market was overdone to high side last couple years enticing world to produce do we did. Not sure how we get out of the glut other then low prices.

[macdon02]

Trend is down sell physical on any blip in basis, buy puts and short futures. $5 bean targets by commercials. The world is awash in veg oil. Sell some 15 physical while your at it. $9 for 15 canola sounds way better then $6. Market needs Brazil to cut back acres. Last thing I would do this year is buy bins. Market was overdone to high side last couple years enticing world to produce do we did. Not sure how we get out of the glut other then low prices.

[mbdog]

thx Charlie for trying to point out the question. Had to go after posting.
Anyway...question was if production risk is in play against deferred contracts, do you by paper protection, and if so which month. Futures should be lower than anything contracted. Not a spec question...a risk management question. Not a texas hedge till in the bin and out of the field.

[cottonpicken]

If my chart memory is correct we have a massive support line at ten going back forty years

[charliep]

Does anyone have access to long term charts? I would have a look at the two component charts - oil and meal. Soybean meal appears remains on the historical highside of prices and has potential to break support/drop further. Soybean oil is on the cheap side of the world at least in the last seven years.

[charliep]

USDA crop progress.

[URL="http://usda.mannlib.cornell.edu/usda/current/CropProg/CropProg-09-08-2014.pdf"]USDA Crop progress[/URL]

[mbdog]

Cotton...1980-2007...250-450$ tonne range.

[cottonpicken]

You pretty much need to go back to 1970 to understand the situatuation,beans where near 10 in 73 and it was monetary policy that put them their and into there trading range till 07/08.

The break out was predicted by me on here.

[mbdog]

retracement into this range is possible. 1970...1980... does chart reference matter that far back? What matters is post 2007 when the rules seemed to change. 384-350 range at some time. Going to be now or leave for a later date?
Million dollar question I know.
Getting harder to talk down/ignore fundamentals. There was a time real fundamentals at least caused a blip on charts. Looking at Nov chart....its been sunshine and lollipops all year long. Its things like this that lead to producer disillusionment at ALL ages. Just sayin...
Got more canola in swath, so choose to do nothing for now.

[cottonpicken]

You may be right and i know the questions your thinking,and i have no answers.

I focus on macro,probably to much.

I do know two things,for a fact,even though knowing for a fact and is not true gets you in trouble.

-Grains are horribly under priced by what ever reference you can use

-The markets are extremely manipulated


Corn itself has broken the paradigm of my thesis.Not my resolve.

So,short term,we may be ****ed,and food is political,but the market is a force unto itself.

[cottonpicken]

Charlie,even though you stopped addressing me,some back 600 years,even a little volume and open interest for ya.did Lee ever find that old meteor car i think it was he was looking for?


http://chartsrus.com/index.php

[mbdog]

Cotton...lol. You framed it well.
I hope you find you're car.

[cottonpicken]

No seriously he was,i even looked for him