I understand

[Hopperbin]

LOL if working for BHP with all the safety issues would have to have 3 hands on the rail plus a safety chain.

[Hopperbin]

Personally I hope it rains cause not going to get anhydrous delivery anyway.

[jdepape]

My main focus is on basis and spreads.
The FARMCo Canola Basis Index dropped again - now down to 10.47 over July. That's five days in a row. Not bullish.

Also, Bunge has changed its pricing over to the Nov from the July. Now instead of 20 over July they are bidding 105 over the Nov. Avoiding the July sends the signal that their focus is beyond that. Others that have stayed pricing off the July have dropped their basis too.

The July/Nov inverse, a good indicator of nearby tightness is also waning - down about $10 in the last two days.

Last year, between May 1st and the first delivery day of July there was over 1 mmt of EFP's - exchanges of futures for cash - and the open interest dropped accordingly. I can't imagine anyone being short July without having a plan on how to liquidate, like with an EFP.

None of these things point to "fireworks" in the July.

[SASKFARMER3]

Hope for no rain we are going full bore and its finally fun to seed. I know that sounds funny to some but its been so long one forgets what nice conditions are.

[jdepape]

July/Nov canola now around 75 over.

July down more than $8, Nov up close to $7.

I wouldn't buy July right now with someone else's money.

We've been saying for a couple of weeks now to lock in the basis. And to never, ever, ever, carry inventory through an inverse.

It's anyone's guess as to when to price in an inverse - it depends on if you want to roll the dice or not. The one thing to remember about inverses due to tight old crop supplies is that the nearby month (July) needs to divorce itself from the rest of the market. It has to do it on its own. So, although soybeans have been helping, for fireworks in the July canola, it's gonna happen regardless of what soybeans are doing.

July/Nov now at 80 over - it's gonna be a bumpy ride.

[charliep]

Not your soybean topic Errol but some of the fundamental numbers for week 42.

[URL="http://www.grainscanada.gc.ca/statistics-statistiques/gsw-shg/2012-13/week-semaine-42/gsw-shg-01-eng.htm"]CGC week 42[/URL]

<a href="http://www.copaonline.net/documents/COPAWEEKLYMAY222013.pdf">COPA May 22</a>

For what it is worth, a couple of comments.

I suspect the size of the canola crop has been under estimated. Similar comment farm stocks. Canola deliveries are slowing but still entering the elevator system.

As Errol has indicated, the export and crush side are also slowing - a reality of what canola is left over on farms. Will be interesting to watch what grain companies prioritize for grain movement this fall in their logistics planning and asset utilization. Historically, grain companies have had a large Chinese canola program on to pull off the combine deliveries. This year? Wheat? The market is still in the process of adapting to the new world.

[mustardman]

Hoping for rain to make sure everything gets germinated and we are done seeding

[charliep]

For those that like numbers, total Canadian canola supplies are about 14.1 MMT (production 2012 plus August 1, 2012 carryin). Deliveries are 13 MMT to week 42. Commericial stocks week 42 - 700,000 tonnes. Assumed farm carryover - 400,000 tonnes.

[jdepape]

FARMCo basis index down for the sixth day in a row - now sitting at 10.26 over July.

July/Nov inverse dropped for the third day in row - down to 77.00 over.

July open interest slipping as well. Longs getting out.

Like I said before - I wouldn't buy this spread (or the July outright) with your money.

And remember - don't ever, ever, ever, carry stocks through an inverse.

[jdepape]

Charlie - just got around to checking the stats. Canola deliveries to date are 11.5 mmt not 13 mmt. (13 was last year)

implies onfarm stocks of 1.9 mmt.