Hot and Dry and Canola prices crash day two!

[SASKFARMER3]

Ok is it just me or is the market really f$%Ked up in Canada.
Most farmers in the west side seeded lots and lots of canola some probably more than last few years as the lotto was good. Most in the East seeded like they usually do but a few of the wet acreage did come back.
So stats Canada number will be out tomorrow. It will show larger acreage but does that number really mean any thing.
Oh wait the Alberta crop report was out this morning with lots of RAH RAH.
It spit the crop can make it another week. FM.
The D word isn't spoken by any one its seems a bad word in Canada.
Yield will not go up even if a monsoon season hit from now on.
So the crop dropped 5 on Friday and 6 today. Yet soy is up do to flooding in USA and fact some farmers took their seed back and put away their planters and said F$%K it its to wet to keep trying.
Yet here hot and dry continues yet canola drops.
Come on Charlie tell me how the market knows and yield doesn't matter.
A crop around 10 makes a difference.

[bucket]

Pretty interesting hey.

Canola production has been almost decimated to half of last year's production and it's getting no attention.

I guess it's all good.

6mmt reduction is a 3 billion dollar hit to the economy. No one cares.

Wheat production will be down.

Haven't seen a decent flax crop yet.

This crop in its present state should have prices moving higher but instead because some lazy ass Greeks who don't even buy our product prices are in the shitter.

What's the next excuse they think of.

I think I should buy a 3d printer and use it to make wheat and canola seeds. That should move the market lower because there will be excess supply.

FFS.

[charliep]

Will put up this mornings November (July is irrelevant). This is a crash? What would you have the market do differently?

[URL="http://www.farms.com/markets/?page=chart&sym=RSX15"]Nov ICE canola[/URL]

If being $10/tonne off the highs in a very volatile market causes you grief, you are doing to be in for a very difficult summer. I suspect the volatility will be a very major feature of the market this summer. If you like markets/searching for opportunities, things will be fun.

[furrowtickler]

Just listened to the Monday sask crop report - most areas got rain last week so all is good . Wow

[Nudge]

So what would be an appropriate move in the canola? up 5$ a day for the next 100 days? what if there was a down day in there where some guys lightened up positions and nobody else wanted to get long? Would you scream that the market does not know? Most of the trade right now is a spec play. People in and out. If there is no hegde pressure coming from farmer selling it will move higher again with time. Maybe today, maybe next week or next month, who knows. Rest asssured that the market will distribute available supply so that there is basically pipe line carry-out 13 months from now. That is its job.

[bucket]

Charliep

How does the market respond to a sub 10 mmt canola crop?

The industry knows there is a shitty crop coming.

Crush plant don't make oil by crushing options puts or paper. They make oil crushing the physical canola seed. There is less to crush.

They don't seem to worried. 11 bucks won't buy alot of canola not because it may be a good price but because farmers are looking at their crops and there is nothing to price.

[bucket]

Furrow

To be clear the drops I got over my entire farm wouldn't be enough to pebble a sheet of curling ice.

[bucket]

Nudge

There will be no carryover. This crop is ****ed.

[furrowtickler]

Same here bucket - I know - they don't

[charliep]

I suspect the answer to your question for a smaller crop will be shutdowns.

As grain company who buys canola from farmers, I would know that higher prices do not make more canola production. So I would be in a decision making mode as to how I would source canola winter and what my share is likely to be. I suspect shutting down could be on the table. But the final crop is still a long ways off (3 months).

Sorry but you will have to play things this summer. As Nudge said better than me, the market is in the mode of rationing what crop production is likely to be. Other years of similar circumstances, the markets put in a summer high. You brought up 1988 bucket (also a US drought). When did the highs occur that year? I suspect you will find July 1.

[riders2010]

Mode of rationing. Hahaha lmfao
There in the mode of stealing what they can now. That's what mode they are in.

[bucket]

Charliep

1988 is only similar in that it hasn't rained.

Half and half farming with wheat being the primary crop and not within a futures markets in canada then and still isn't now.

But the price of wheat was higher then too and if you did an indexed value, like your salary, wheat would be worth 17 bucks right now. Not factoring in the drought.

[farmaholic]

Ok, serious question Charlie. Since I have so much as admitted I don't have a clear understanding of the "functioning" futures market I need advice.

Let's say I have little to no physical canola to sell yet I still want to "participate" in the market. Let's say I have no canola for this example.

How do I get in, what do I need to do and what is it going to cost me, at this stage of the game.

[charliep]

I guess you made it through 2002 unscathed. That year is etched in Alberta farmers minds. A very difficult year but most made it through to farm again in 2003. Pain resulted in a lot of creativity that included finding enough to feed a rather large cow herd.

bucket. You are in a disaster situation. Just curious is you took the variable price option on your Saskatchewan Crop Insurance? Your coverage would a lot higher if you had.

[farmaholic]

ps, I would be certified insane if I thought is was a good idea to preprice any physical canola the way it looks today. If there is anything worth swathing, the next risk will be a wind that scatters the skimpy poorly anchored swath. I can't wait to put 2015 behind me.