Had a Chat with Canola council of Canada Yesterday in Brandon!

[charliep]

Not questioning your right to make decisions about what to grow or how intensively. I assume you pretty savy/know how to do budgets and from there make profitable decisions.

My point is you have a line up of committed customers who will be there to buy your canola year in/year out. Your customer is not the grain company or the crusher - they are crusher in Japan/China or oil/meal buyer in North America. They will put a value proposition forward that will keep farmers putting in canola acres. The day they stop/move to another will be the day our industry will be in trouble. The new world is demand pull - not supply push.

[SASKFARMER3]

Yea recheck whats happening in the world. Demand is really tough when people cant pay for it.
The 1% that own more than the rest of us still run the show.
Canola was killed by industry the buyers from over seas just are having fun. Seed costs are to high and what we get for the product are to low.
We should be over 11 with a shitty dollar 9s was out their yesterday and today they widened their basis.

[agstar77]

Unfortunately this drive to increased production has come at price. Decreased rotations and over production. Farmers are not heeding world price signals to the detriment to our environment and the sustainability of farming. Large producer groups such as the Canola growers are moving in a self serving direction without regard to these issues. Its the Mantra of increased production is good at any price. Has increased production and more value added crushing slowed the erosion of rural Sask? These are just a few points to ponder in the bigger picture.

[freewheat]

Also remember that canola average yields have been trending higher. Why? Because of seed improvements? NO! Because the non traditional areas have been blessed with better than long term average rainfall.

Kindersley is not a place you would expect to see canola yielding 60 bushels an acre.

If they want to assume this will always be the case, and that rain will always fall in normally borderline farming areas, fine.

But IMO, if they think we are going to grow 52 bushel average crops over the whole of western Canada, based on seed and a few agronomic benefits, they are mistaken.

It still takes good weather to get there.

We have been collectively riding a wave of half decent moisture falling from the sky, and relatively cooler summers than typical.

And now, with the seed guys pricing themselves out of sales, where an average crop of canola just fails to pay off well enough to justify seed costs, they are shooting themselves in the head.

Don't even get me started on the new disease and insect problems caused by pathetic crop rotations. Not to mention the ones that inevitably are yet to come...

[charliep]

Can you help me understand something.

I am going to start with the western Canadian farmers are good managers. You can put the range in but for the most part, they manage a $2 to $5 million asset business. A major part of this is managing risk in a very uncertain world.

SK3 tells us canola doesn't provide a profitable value proposition in rotations. agstar/freewheat tells me managers are pushing rotations - a farmer decision based on ___ (someone can fill in the blanks). Help me understand.

Sorry for being a numbers guys. Deliveries 7.2 million tonnes, up from 6.6 last year/above other years pace. Exports to date 3.7 million tonnes, up 13 % from 2014. Crush similar pace but will pick as LDC Yorkton comes back on line/Camrose opens. Edmonton May delivery canola $10.20/bu using a $4 over July basis. Markets are going higher. Basis? Place your bets/take your chances.

[farmaholic]

SF3, how the hell do you expect them to keep a $10.00 ceiling on canola prices? Everytime there is a move higher in futures they widen their basis to hold the price somewhere under $10.00. Then everyone's magic number is always $10.00 only attainable using GPOs or TPAs!!!!!!! Fricking brilliant says Dr. Evil from the Graincos ***** shagging me.

LOL... (insert Dr. Evil's sinister laugh)

[farmaholic]

.......or as Hopper pointed out, flip a month ahead and pocket the spread.

[vvalk]

sold canola this morning into lethbridge for march delivery at $10.32.
will probably going higher yet
if your mad about basis, lock it in and take that out of the equation. Then if futures go up, you get it all.

[farmaholic]

I hear you vvalk, I fully understand your point. But, how many delivery options do you have once you've "sigh"ned that basis contract? Or do you really only have one viable option before the possible gain gets eaten up by the distance(freight) to the next option?

[Hopperbin]

Farmaholic I think its eat the spread.