$12 July canola...

[farming101]

Farma, sounds about right. My angle with being a daily market and chart watcher is that even if you never trade futures or options, it keeps a guy informed. And that in turn will most likely result in better returns.

[iceman]

[QUOTE=wmoebis;336866]Do you feel the guys that refused to grow or sell through the CWB are better marketers than the rest of us and have the upper hand?[/QUOTE

I don't know if I would say they have a upper hand but a better understanding for sure. It just seemed the CWB's marketing machine was successful in convincing farmers that they weren't smart enough to market/ trade their own grain. If guys hear that enough over a long period of time they eventually believed it to be the case. Than when the CWB left there was a huge learning curve for average farmer to pickup and of course the sharks began to circle.

101 nice bean oil put trade. Are they your preferred method for option hedging canola? I never used them and always used canola puts. These canola options always seem to be so thin that the bid asks are wide and sometimes hard to get in and out of.

iceman out

[farming101]

Always seem to look over to compare BO options with Canola options.
BO usually compares favorably.
10 BO puts bought carefully can protect about 500 tonnes of canola. That does not include commission.

[farming101]

Jan 31 2017

[iceman]

Jan 31 2017
[ATTACH]1165[/ATTACH]

That ends that discussion. Thanks for the charts.

Any thoughts on beans in the short term? Will be see a small bounce before we head lower?


Iceman out

[furrowtickler]

Agreed , thx for the charts 101 👍

[farming101]

Bean uptrend still alive. A bounce off 10.13H would be positive. It's looking like the Jan 18 high will not be taken out. Possibly 10.36-10.60 as a high.
Continued weakness for the rest of this week will put that all in doubt. anything under $10 will find new selling

[farmaholic]

Am I the only one who needs an explanation allot of the time? Or the only one ______ enough to admit it?

[farming101]

Fire away

[farmaholic]

What am I supposed to be learning from the canola-bean oil chart. Why are canola puts still rising and bean oil's coming down.

Why 10 and 50. Approx equivalent value

What else?

[farming101]

The chart is tracking the value of a relatively equal (to start with) put purchase

10 bean oil puts tied to the July contract, 50 canola puts tied to the July contract
The 490,495,500 are the strike prices for canola
34 cents is the strike price for bean oil
The bean oil value dropped today because it took a breather from its sharp downturn as of late
Canola kept dropping so the put increased a little in value
There is also a conversion to CAD for bean oil with the dollar value at noon on the Forex
One bean oil put option gives you the opportunity to short one July beanoil contract at the 34 cents(60,000 lb)
One canola put option gives you the opportunity to short one July canola contract at the strike price (20 tonnes)

[farmaholic]

On your chart, when would you "get in" and what was the initial cost of each contract at the time?




Today:

A July $520 canola put is supposedly costing about $19 bucks.... so is that basically $380 to protect a twenty tonne July contract at $520.

43 cents a bushel.

So you would have to basically get $539 to break even(cover the cost of the put).

But if canola would drop and the put increase in value.... does it basically increase in value equivalent to the drop in canola price?