50 dollar flax

[cottonpicken]

Accidently interupted another thread,i'll start a new one.

I like to be conservative in my calls and so i'll stay low with 50 bucks.

Timeline one year.

If the exchanges still traded it,it would be higher.

Am i copping any mainstream analysts?
I dont bother reading them much any more.

What do you think LarryW?
Farmlinks?
Western producers people?
Lee?
Charlie?
Fran?bucket(i know you two want to say 49 or 51)

Lets put out some hard numbers and show those cwb people how easy it is.

[parsley]

Yellow flax inquiry for fall delivery, on Thursday.

They were interested at $60.00/bu asking price FOB farm.


Parsley

[TOM4CWB]

"The head of the Organization of the Petroleum Exporting Countries, said it had been clearly established that speculation was affecting markets.

Oil Prices... why are they high?

OPEC Chief Sees $150-170 Oil in Coming Months
Topics:OPEC | Energy | Commodities
Sectors:Oil and Gas...

"It's not a question, but a certainty. The problem is the extent of that speculation on the market," he said, adding that the effect of the subprime crisis in the United States had affected oil markets.

Asked what the main factor behind the rise in prices had been, he replied: "I think it's the devaluation of the dollar."

"You can see, every time the dollar strengthens, there is a fall in prices," he said.

Khelil reiterated that OPEC tried to meet the demands of the market, as its statutes required.

"It's very difficult now to find a market. If you tell me there is someone to whom we haven't sold oil and who needs it, I'd see, but right now I put my oil on the market and I don't find buyers," Khelil, who is also Algeria's energy minister said."

http://www.cnbc.com/id/25386960

[bucket]

Cotton

If I follow your lead when asked a question let's throw inflation into the mix. I explain myself (on previous threads you wouldn't, let alone actually answer the question) oldtimers still smile when they tell me their story about selling flax some 40 years ago for 14-16 bucks. So inflation adjusted what you are saying about 50 buck flax makes sense (odd). Will it get get there, I sure hope so as I have over 800 acres in. Realistically I am not contracting any at 20 because I don't know what I am going to have in the bin. You see the consistency in my thought - don't sell something you don't have. The cwb could learn something from that line of thought and that way they wouldn't end up giving our grain away.

[charliep]

Just curious why $50/bu? Flaxseed is an industrial oil used in some (not all) oil based paints. Also linoleum and as highway sealant. Can be used in human food but goes rancid (reason it is quick drying). Note the trend to Omega 3/flaxseed health benefits. Europe is the main market for export flaxseed. What market factor would push conventional flaxseed (not the organic Parsley is markeing) this far out of line with other oilseeds. Or are you forecasting $50/bu canola as well?

As you know, I hate forecasting (been wrong too often) but do like to put things into the context of risk/reward. If you and I were to place a bet, what kind of odds would you give me? I would start the process at 5 to 1. Your $5 to my $1.

[charliep]

Also curious on your last statement/first posting. Is your assumption the CWB should be a speculator on behalf of Canadian farmers? I would highlight their measure of performance/statement about their risk management strategy on page 43 of the 2006/07 annual report.

[cottonpicken]

WHY ARE YOU HIJACKING MY THREAD WITH CWB NONSENCE!!!

Just kidding.

I thought that pryer thread question was sufficantly answered/obvious.

How the hell am i suppose to know how they come up with stuff?
Ask me how many stars are in the sky.
Their quesstimating.
I dont remember them calling the grain spike beforehand,therefore i dont trust their judgment.
And yes i know less about the cwb than most here cause i dont have the time/interest in it.
Canada has very little impact in this big,big world.

50 dollars is simply one third of the inflation adjusted high.
But its not traded anymore.
Consider that at one point in time 2 bushels bought one ounce of gold.
Gold is over 900 dollars!
Things that make you go HMMMMMM.....
So all that considered is flax high or low?

And yes someday canola will hit 50 dollars.

In zimbabwe its already over a billion dollars.

Tom understands whats happening.

The gold standard was abandoned and the system is failing.Nothing can stop what is happening.

And even though i told you years in advance,even now you still dont get it.

[cottonpicken]

The oil market.

85,000,000milllion barrels/day x 140$=


11,900,000,000 billion dollars

everyday

How many acres of flax?

I dont know? lets say 5 million,lets use it for fun.

5,000,000x20 bushels/acre=100,000,000bushels

times 20 dollars


2 billion dollars
365 days(a few hours of oil trading)
50 dollar flax
5 billion dollars

A few more hours of oil trading.

[TOM4CWB]

Charlie,

We are in for volatile times... no matter how you slice it!

Jerry on DTN is one of my favorite market annalists... besides Larry OF COURSE...

A little portion of his June 27 column:

"So I would think any action would be towards the spec and index funds (long-only guys) who view crude as an asset, just like we do land and houses. Hmmmmmm.... does that mean if we get a socialistic-type government next year we may be constrained on what kind, where and how many other assets we may own for fear it will run up the cost in total?

It is a dangerous situation when the public or Congress tries to find a scapegoat for something they let happen. We let energy prices explode on demand without providing a real energy policy for the past 30 years. It is election time, so don't underestimate knee-jerk reactions! I have a hunch that this administration would just as soon let all this ride into next year and let next president deal with it. On the other hand, the Democratic Congress would like very much for all this to be dealt with and anything that hurts the financial markets, banking or ag industry be blamed on the current administration.

It will be interesting to see how all this shakes out and just how much of a price-determining free-market system we have (or want to have) when it is someone else's ox being gored. There is a real and present danger of some mighty big poor decisions that could be made in the next hours, days and weeks. Let's hope common sense prevails. If you are a nervous producer or end user, the markets trade Sunday night!!! If you miss me on CNBC I will post it on www.jerrygulke.com."

[cottonpicken]

And expose ourselfs to what we were all along,command and control.

[charliep]

No doubt about being exciting times. As highlighted before, I try to orient my thinking to understanding and making decisions based on risk analysis (both benefit and negative consequence). My suspicion is that the market would not go straight to $50/bu (or the actual high) but will move up and down.

Not taking away any seller right to withhold crop from the market to get a better price but also highlighting the need for daily opportunity to trade. A buyer who has just in time storage has to be able to enter the market on a regular basis to purchase what they need. Also note the limitations on movement within Canada. For example (haven't run the number recently), capacity on the west coast (Vancouver and Prince Rupert) is about 1.75 mln tonnes. Implication of both the above is the system has to have a steady flow of product.

[charliep]

The 1.75 mln tonnes at west coast is monthly by the way - 21 mln tonnes annually. Others will have a more precise number.

[mbratrud]

Sounds like a fair number to me!

[charliep]

Just to put the numbers side to flaxseed, statscan estimates that farmers seeded 1.5 mln acres to flaxseed this spring. Assuming an average yield of 0.5 tonnes/acres (20 bu/ac) would result in 750,000 tonnes. Disappearance has averaged about 800,000 tonnes (600,000 exports and 200,000 domestic). Carryin end of July should be about 100,000 tonnes which is pretty much empty bins. Supplies are no doubt tight/will require some type of rationing.

As a note, Europe represents about 80 % of the Canadian export market.

[parsley]

Domestically, there are very few of the bigger Canadian grocery stores that don't carry consumer sized bags of flax.

If 30 million families have a bag of flax in their cupboard, demand will grow. We need to convince Chinese citizens they need a bag of flax in their cupboard, too.

Parsley