Traders still think a large canola crop?

[furrowtickler]

I snickered to myself when i read this tonight on Webbers. So where is this large canola crop comming from? Alot of frost the last few nights in western canada, also reports on yeilds are far from it.

[bucket]

I think some of it comes from statscan. When the trade/grainco need an excuse to lower prices - all of a sudden they foung 750,000 tonnes of canola from last year that was unaccounted for.

They will continue this fraudulent reporting until someone realizes the canola is not there. Its too bad farmers won't be the first to realize it - they have the most to gain.

[grefer]

In our area,Saskatoon to North Battleford,there is going to be alot of poor quality canola.Very poor germ in spring and late germ when rain finally came.Talking to different producers they have three stages of crop in each field and not sure of the best approach to harvesting.

[SASKFARMER3]

This is all a big sham. The USA and Canada and Australia and Argentina Wont rebuild stocks at all at the rate their going.
1st Never any reports about the extent of the drought in Peace River country. Sorry lots of Canola grown their.
2nd Hail storms on irrigation in southern Alberta and major.
3rd Stupid spring frosts that all experts said didn't hurt any yield.
4th stupid stats Canada and their two month behind crop reporting yes in Mid July after blooming for 3 weeks plus I would have said crap I guess we got a bumper if I was stupid. Hell their still is 5 weeks of weather that can kill it.
5th Election year in India and they are making up every excuse so not to rock the boat and cause panic because they want to win again.
6th Us election their dollar is rising but their debt is so high would never be able to cover it if they collapsed Yet ours is sliding.

Simply the boom only lasted 16 days then all reports were for bumper crops before they were seeded. Now its all Depression HM.

[dave4441]

What is the price of canola at? I do not think the market has gotten too carried away, still at a high price considering it is the middle of harvest. Look at peas instead, we have lost 35-40% of the peak value. Take 40% off 16 dollar canola and it is $9.50. I do not think Canola is doing that bad.

[boarderbloke]

gerfer, we had exactly the same situation down here SE SK, everything of course is swathed already and a good portion picked up. the first stage was shelling a little, the second about right, the last stage was still plenty green to be swathed, but what do you do! if we would have tried straight cutting this year, there would have been huge losses with the amount of wind!(bad enough being in rolled swathes) on fields harvested, the last stage contributed a fair bit of pepper to the sample adding to the dockage. also the frozen patches never filled in, and those spots all had lots of down and lodged branches around the edges because of open, bare patches not supporting the surrounding the crop. have you been swathing canola yet?

[Zaphod]

So does this mean that any time news is bearish, it's either wrong, a conspiracy or incompetence? Based on what I've seen, the grain trade isn't smart enough or organized enough to do what you say they're doing.

I'm not saying the Canadian crop isn't getting hurt, but is it possible that the global crop is actually big? Wishing it's small doesn't make it so. Groups like the USDA, IGC, FO Licht and independent forecasters are all saying the same thing. If you want to argue with them, that's fine but you better have some pretty good evidence and not just wishful thinking.

The warning signs have been showing up for quite a while and you're free to ignore them, but those who advised some sales earlier on like Brenda TL were recognizing the risk and acting on it. Nothing cures high prices like high prices.

[bucket]

Fair comments zaphod but where did statscan magically find 750,000 tonnes of canola from laast year? Their only explanation was to say they did not want to end up with negative stocks. Just saying there a big crop is as bad as wishing for a small one. I think what the contributors to this website are saying is the canola crop is not as good as the trade is expecting and have been saying it for a long time reading the crop reports on this website.

Sure there are alot of high priced contracts to be filled but once those are filled how is the trade going to get it out of the bins?

Last year $8 canola for november looked great but I know producers who were lucky to fill those with the dismal crop they had. They had swept out there production before the price rise. That may happen again this year and judging by the reports on canola on this website it more likely than last year. The peace is a mess, hail down south, its just not a bumper.

[boarderbloke]

what i'm watching now, is the paths of all these hurricanes, they have the potential to put a lot of moisture into the midwesteither by their path or linking with lows further north. there have been other years where many acres of bean ground was too wet to harvest.

[boarderbloke]

what i'm watching now, is the paths of all these hurricanes, they have the potential to put a lot of moisture into the midwest either by their path or linking with lows further north. there have been other years where many acres of bean ground was too wet to harvest.

[Zaphod]

Good point about the 750,000 tonnes. I'm not certain, but my take is that when they asked guys about their July 31 stocks, more canola showed up than they expected. The same thing will happen in lentils, probably mustard and maybe even durum. We could see some serious backpedalling next week, when StatsCan puts out their next S&Ds. That doesn't mean that any of these crops will be burdensome, but if they did screw up, it would be in underestimating production last year.

Gotta remember that it's only one estimate and the market will eventually settle out at some kind of equilibrium. If StatsCan is wrong, the trade will ignore it or discount it. Usually, the impact of a StatsCan report doesn't last more than two days and then the trade gets back to business. From what I hear, the line companies put way more stock in what their local guys are saying than in StatsCan.

[charliep]

What I think people are talking about is market information and using it to make better decisions/develop a marketing plan. If anyone thinks the Canadian canola crop is overestimated based on current information and international prices/US future have over reacted to what seems to be good news (plus you have bills paid this fall), then by all means lock the bins this fall and sell winter/spring.

Perhaps as being an occupational hazard of being an analyst, my attention is focused on the consumption side. Will note in this weeks western producer the COPA quote which highlight at least 4.5 to 4.6 mln tonnes of Canadian canola crush in 2008/09. Japan comes into the Canadian market for 1.8 to 2 mln tonnes (depending somewhat on the Aussie crop). Mexico is there for a further 1 to 1.2 mln tonnes solid sales. You can add in US plus other regular buyers and some dockage/seed and you have 8 mln tonnes of every year productiton requirements to satisfy these committed business.

You can put in the number has to actual production and where the extra will be sold. Grade is an unknown as well and if the negativity is right, Canada will have to be finding a lot new homes for 3CW and sample. This will be a far bigger issue that production.

[charliep]

I should also note that a major theme in this weeks western producter is whether there is enough canola production capability in N.E. Saskatchewan to supply the 2 new crushing plants. A good thing for farmers (particularly local ones).

[agstar77]

Something that may be of interest, if you listen to cramer on cnbc, he has stated that China has stopped importing. They are not ordering cargo ships. He believes this part of the comodity collapse. When they re-enter the market there will be a commodity rebound.

[GreenValley]

Been done using cash advanced from Canola
Board, I think. Just go to elevator and request Cash Advanced for Canola. Will do again this year and lock bin and throw key and open in spring or summer as heard that there is no sunspot for entire August month as it may getting cooling instead of warming. I am in for 16.00/bus, go for wild ride again in spring or summer 2009 not in fall or winter.