Canola,,, 20% left,,, what price pulls it?

[errolanderson]

Kodiak . . . yes and yes.

The spread between Nov and July is very wide (IMO) given the possible slump in old crop demand before crop year end (my opinion). Don't believe July will meet Nov, but it might meet it half way . . . which would still be a hell of a drop. Or simply purchase some July put options for a song right now (less risky) and if this market craters, these puts could turn into gold. (Bad pun . . . gold could take a further price whipping). A $600 July put was trading for $4.50/MT (10 cents/bu) today. Not much premium risk for the holder. In my opinion, July may retrace its steps both up and then down.

And as John explained more elegantly than I, storing grain into a huge inverse is just poor marketing.

The tight supply card and the last one to sell 'wins' mentality doesn't cut it in this deflationary global market environment.

Just ask any western Cdn cattle feeder for an explanation. Failing beef demand has trumped tight cattle supply creating a wide-spread cattle feeding wreck.

And this lack of demand is what hammering at global commodity markets one-by-one right now . . . .

[Kodiak]

The thing that is going to keep me from selling the spread at the moment is even though I agree demand may slump before year end, supply is going to slump as well. With old crop cash prices at $120 premium to new crop, I'm not inclined to sell a futures spread that is only $70.

And yes those $600 July puts are cheap. Good tip. 10 cents is nothing to protect a $15 product. Thanks.

But---- maybe tomorrow the $610's will be 10 cents;-)

[ColevilleH2S]

Dumb luck hit me square across the face this morning

Income tax is due next week, so I priced a whack of Canola this morning for immediate delivery. Felt like a Wizard when the market nosedived in the afternoon.
<a href="http://photobucket.com/" target="_blank"><img src="http://i335.photobucket.com/albums/m441/npksetal/wizard_zps5541555e.png" border="0" alt=" photo wizard_zps5541555e.png"/></a>

Rather be lucky than smart.

[cottonpicken]

Errol,errol,errol

My favourite dog died today-really

And i dont have an ounce of compassion left in me

Your bullshit deflationist argument ,is the most
ignorant,harmful bunch of nonsense cancer ever put
in the minds of men

You think a bullshit pension,salary or savings account
is going to buy you more in the future,you are
delusional...cash is trash

[cottonpicken]

Took that a little to far,sorry Errol.

[charliep]

Perhaps the market is the ultimate referee on right and wrong. If you fully admit you don't know (which I do), then the question is about managing risk around decisions in the short term which meets the long term objectives of the business (provide the farm family a good living and grow equity in the farm business. Risk isn't something bad - it is both pain and gain. You just have to know its there and accept it, migitate it, or hand off to someone else.

[charliep]

I always like to simplify things. I am a farmer that grew 17,500 bu of canola - 5 3,500 bu bins. I have sold 4 bins (14,000 bu) at various times during the year for an average price of _____. I have my last 3,500 bu bin left. When do I sell it. You put the financial/cash flow needs of the farmer in but I suspect can easily carry into the summer financially.

[ajl]

Jack Crooks at Black Swan trading would tend to incur on what
Errol said. They recently made a fortune shorting the Yen vs US
dollar. Rising US oil production helps the US service debt which
causes the US dollar to rise which is bearish for commodities.
Cheap energy (Nat Gas) is bring jobs back to the US from Asia
where NG is four times as expensive. Also the fiscal cliff and
sequester is cutting the US deficit which is also bullish the US
dollar.

[Hopperbin]

I have a great deal for anyone storing canola :-)))) A jackhammer with a special attatchement for heated canola chipping crunching. Wait for that.

[Hopperbin]

That last 10 percent just may need a jack hammer? Just wondering

[hobbyfrmr]

In all seriousness if a person does havejeated
canola be sure to ALWAYS wear a mask if you
have to handle that stuff. There was a young
farmer died from spores about 25 years ago.

[Burbert]

Those that need a jackhammer to do the
pull with are mental anyway. They'll
never sell at any price, wanna smell it,
eh Fharperenritz!