Markets Beginning 2015

[ado089]

The roll to new crop also comes with $30 basis hit so you loose more than you gain.

[charliep]

Actually I can't. Every company runs their pricing differently based on their business needs and risk management strategy. You have to be aware of what the companies policy is and live it with once you sign the contract.

[Hopperbin]

Ado you may well have done very well. One point is you forgot the 3 dollar per ton charge to roll. What is your cost for rolling two futures months?where do you find a grain company with basis the same in those months?

[ado089]

Hopper, it was Clavet. It's -$2.50 basis picked up. I think because I did it all at the same time they don't charge for the roll.

[crusher]

Ado that seems like a good strategy. In my backyard we have a wider basis for spot and narrow further out so the execution wont work here. I would suggest you sell the cash and buy back the July. You get your money now. If you don't have a futures account - get one. Just for this trade it would be easy to get your feet wet.

[Hopperbin]

Ado I believe what you did was a cheap roll. Target price agreement without the paper work. Basically the only contract was the one you signed for 7:50 over july. No fee for that. Interresting very.

[Hopperbin]

I mean not a roll at all.

[ado089]

Crusher I like that idea too but my trading account is a shit show right now that needs to be cleaned up before I can do anything with it. I have a bad habit of turning into a speculator during slow times. If I was smart I would use my freshly minted $10 to buy puts on these tonnes.

[farming101]

Yes, buying a put would limit the risk that the futures price for July tanks.

[Hopperbin]

Although I am pretty much considered sold out on canola until I deliver will have scraps to sell. That said canola had easy movement this new crop. The other big one wheat is more of a challenge. That said I believe the issue is wide spread. Meaning canola basis may well have upside potential that we have never seen unless futures prices kick in. Is futures broken? New crop should be higher than july cause there is just going to be no canola left. Maintenance shutdowns lots of time for them. That said any movement out there on some wheat. Wheat is a pain.

[farming101]

Mar Nov spread
<a href="http://photobucket.com/" target="_blank"><img src="http://i1211.photobucket.com/albums/cc421/farming101/Mar-Novspread_zpse1a0b2c3.jpg" border="0" alt=" photo Mar-Novspread_zpse1a0b2c3.jpg"/></a>

[ado089]

Farming, I sold some March $430 calls a while back so I'm covered pretty good to the downside from here. The margin calls in the new year are causing some butt hurt though. I wanted more time value to drop out of them before I dumped them. I guess I'm getting a higher delta now but for the wrong reason.

[crusher]

Farming101 - nice chart post!! Didn't think that was possible.

Nice move in beans today, would be great if it took out the old high, although that is still 5% ($.45) away. Maybe canola can add another 5%. Time to recheck the next round of GPO's.

[mcdon]

Don't count on canola spreads returning to carry any time soon, market working off of 1 million tonne carryout...1 million tonne carryout a tighter scenario than is was a few years ago given increased demand..

[Braveheart]

There were some strong basis bids into crushers here last week. Time to reward this rally with a sale.