Watch the Canola Carry

[farmaholic]

I can agree with the opportunity to pay down debt and reduce interest, but to cash out the canola and put the money in the bank at dismal rates hardly pays. I am not arguing and see your point. But everyone's circumstances are different.... that is why I compared it to COP which is slightly different for everyone as well. Sometimes the market will factor in the "loss of opportunity expense"...carry, but it would never amount to a dime a month at one time(far out). I like gambling on the physical. Between futures gains and positive basis adjustments... there can be some nice premiums...but you have to watch.

There are some "dismal" canola prices now(harvest thief pricing in affect) but I bet at least $11.00 street commodity canola is in the cards in the future. There is my two cents.....

[farming101]

Yes, know your COP and how badly you need the income for expenses/payments.

I don't gamble but I like farming. There's a riddle!

[errolanderson]

farmaholic . . . lets say Jan canola is at $470/MT

a Jan canola $460 call is; $10 in-the-money
a Jan canola $470 call is; at-the-money
a Jan canola $480 call is; $10 out-of-the-money.