Canola prices

[farmaholic]

People here are saying we aren't being properly paid for canola. With the CAD where it is, and the board crush margin around $85/t and a year ago almost half of that, at about 85% crush capacity and ahead of last year. July closed above $500 and for a delivery point near me, July broke $11.00. Where are exports compared to last year farming101?

How much should it be worth, farm gate?

[farmaholic]

Christmas doldrums ahead? Tomorrow it will probably give some back, the Grinch who stole Christmas!

[farming101]

Canola is moving good.

Exports are up 10.8 percent, Producer deliveries are up 10.9 percent and Domestic disappearance is up 15.4 percent. Week 19.

Why aren't prices higher? The system is well supplied. In other words, farmers are selling. A little basis tweaking by the companies and a bunch more gets signed up.

The crush margin is really an index. It is in dollars, but does it reflect the actual profitability for the crusher? I really don't know. I think the meal factor is too rich?

One thing I have been tracking is producer deliveries to the crusher, crusher stocks and volumes crushers pulled in from sources other that direct producer deliveries.

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Processor stocks are significantly lower than last year. Again, not sure why. Cargill Camrose is running now so you would think stocks should be higher??
Changed the way they report? Anyway if they are accurate numbers it could mean that after the doldrums there may be a little time after the new year with some higher bids. Two things could spoil that, The Jan. USDA report and more farmer deliveries. As long as the weather is good I would expect fairly heavy off farm movement early in the new year.

March canola chart is looking quite positive. After a quick dip to 480 last Thursday it is up at 490 and pounding through a few pieces of overhead resistance.

If I had a position on, (which I don't), I would say 485 might hold for this short week. It really has to take a run at 500 Mar now to show this is for real. Who knows?? Open interest in the Mar was up today on very good volumes. Some new long positions?

[farming101]

Whoops! Basis is changing at the crush plant and not in the farmers favor.

What should the price be at the farmgate?
Higher! It all boils down to cost of production and locking in a good profit.

[farming101]

Just looked at the crush margin report. Actually last year it was a little higher than now in CAD and quite a bit higher in USD

[farmaholic]

About $11.00 for July. Minus $16 basis...local terminal.

Is there enough supply and will there be enough demand to sustain or see prices rise. There is always a debate about actual available stocks

Will the world "economy" be a boat anchor?

[farmaholic]

Oops, the marketing news letter I was looking at has last month at nearly half of last week's margin....my mistake.

Yea, quite a difference in USD year ago to last week.

[farming101]

Since the boost in 2015 production numbers things are a little blurry.
If the total supply numbers are half way accurate Canada won't be running out of canola this year. As always price has a lot to do with how much is left.
Prices hit 12 bucks briefly last July and there was still some on the farm.
There is some talk of lower palm oil production and relatively tight European ****seed stocks, but soybean supplies should keep a lid on things at least till harvest is well along in SA.

The Mar-Jul canola spread is narrowing.

[farmaholic]

farming101...last year it looks like the Processors were in a better stocks position compared to this year, starting week 12 the lines are actually diverging. Maybe that is why they were able to hold canola below $10.00 for a good part of last year post harvest and winter. They are holding about 70K tonnes(?) less starting week 15. Lock the bins, lol. The Producer deliveries look more like a hand to mouth compared to this years Processors stocks...

[wheatsnowcanola]

Soyoil is around $.43/lb. CDN. Not sure how it translates to canola oil. If it was straight across, that translates to about $425 worth of oil/tonne. Plus the meal!!!! STOP giving away your canola!!!
Basis should be way better!
All your inputs are based off of US$.
$11CDN equals $7.90US. Hardly get excited about that.

[farmaholic]

Weber has Velva N.D. canola at $10.23 CAD, converted to USD is $7.23 ... is that possible?

So are we really doing that bad in comparison?

[farmaholic]

July about $500... Your $425 plus meal and margin?

8-9 months before we get anymore added to Canada's supply.

What are you holding out for? $12,00

[farming101]

Canola meal trades at 75 percent the price of soymeal in California. 245/t. It was 357 last Jan.

Once the freight to Calif is backed off I wonder what the crusher is getting for it.

[wheatsnowcanola]

Not holding for $12. But $11.40 will do. Haven't sold any yet. I will get it soon. Unless SA stays dry. Then i will hold for more.

[wheatsnowcanola]

Priced out a new S680 with pickup and 35ft straight cut earlier this fall. Shocked at price then. Now worse. $850,000 list CDN. Suddenly, canola seems too cheap.