$700 canola. Sell or hold out for more?

[vvalk]

Sell another increment? Or are we headed for the perfect storm for commodity prices this fall/winter.
Also what do you think aout buying DEC corn 08 and selling DEC corn 09?

[cottonpicken]

In my opinion.

It is a horroble time to be selling canola.

There is no evidence or reasoning the market will break lower.

We are at the bottom of our trendline and imagine we will be testing the old high of 760ish shortly.Hopefully we pound through it and dont bump our heads and fall down.

[melvill]

There is a very interesting quote from Timothy Hayes, the author of "The Research Driven Investor".

He says, "The market is least risky to the downside when all the bad news is known leaving virtually unlimited room for positive surprises. The market is most risky to the downside when all the good news is known leaving virtually unlimited room for disappointment."

Does the second sentence describe where we were in late Feb and early Mar for wheat and early Mar in canola and what we're approaching in corn?

[charliep]

Will note today after a pretty positive USDA report, soybeans (and canola) have slipped into the negative numbers after a higher open. One day does not a market make but it would appear to be a bull market that needs to be fed positive information (realizing we are at contract highs with beans and corn).

When someone asks about a target price, I have to bring in the farms financial situation. Advice for someone who needs the cash would be different than their neighbor who views the canola as an investment/can afford to wait to be paid.

From there, the question always is how you approach. Target price/prepared to wait. Run a trailing stop behind as long as the market moves higher but prepared for a decision when the market breaks. Watch for good basis levels to trigger selling and then use some of the cash to buy calls.

I note the question in the original posting about the old/new crop spread. Thoughts.

[charliep]

On the Dec 08 and Dec 09 corn spread, will note the 40 odd cent inverse. How much weather is in the 08/09 corn market? I assume 09/10 US corn supplies will remain tight and at this point will have limited downside. If you put a weather crisis into the 08/09 corn crop, will be inverse widen or will the issue drag all corn months higher?

[poorboy]

Unfortunately we seem to be headed for $700 canola, but it has a $60-150 basis attached to it!

[cottonpicken]

Corn hasnt made 300%.

[parsley]

A downward juggle in USDA’s 2008 US corn yield estimate

Down 5.0 bu/acre to 148.9 bus/acre.

Funds bought 9,000 contracts


Parsley

[mbratrud]

I like Nov 08 at $700 without a Basis, and If Basis levels still looks crappy in Sep, Oct you can roll your posiition out and pick up the carry. July 09 should be around $740 - $750 with full carry. I guess it depends how much you have sold?