Canola rally

[dnach]

Canola woke up this morning, will we see over 8$/bus and for how long? A .75 lonnie would be nice now.

[charliep]

Just a note to see where you are located. $8/bu equates to $352/tonne. With March futures yesterday at $375.30, this is a $23/tonne basis.

A interesting note is the soybean complex rocked higher again today and canola hardly moved.

My signals for action over the next few weeks will have as much to do with basis as with higher futures.

Is $8/bu a trigger pulling area?

[dnach]

$8.04/bus at cargil, north battleford

[Incognito]

$8.45 ADM Lloyd July

12 under

$18.40/MT advantage

$13.00 Interest carry cost

Not worth the wait and the distance

Enjoy your posts dnach - thanks

[rain]

-10 deliverd Calgary, May, -5 June

[Pen-Dale]

How would you guys like to sell canola in Manitoba??
The basis here in western Manitoba is between $30.00 - $40.00 /mt.
The basis for Nov 04 delivery is between $40.00 - $52.00 /mt.
The WCE had best fix this contract as it does not reflect the price of canola in Saskatoon. If you add the freight from Saskatoon to Vancouver at $42.00 plus some FOB cost of approx. $10.00 you end up with a basis of close to $95.00 /mt. That is what we had in 1996 when the WCE changed the canola contract because it was not working.

[TOM4CWB]

PenDale;

I checked on http://www.wce.ca/market/framework.asp?report=rse

You have many WCE delivery points in Manitoba... and I see Fimat delivered 5 contracts to Cargill today @http://www.wce.ca/market/framework.asp?report=rse

Have you ever held a Canola contract and delivered it against the futures?

Talk to Louis Dreyfus at Rathwell or Virden... as well, since Cargill is taking actively delivery... why not give them a try?

Contract Specs for delivery are at;http://www.wce.ca/ftp/bylaws/Rules/Rule15.pdf



Further talk to the WCE

[Incognito]

With all due respect, Sir, and please do not think for a moment I am sticking up for the contract BUT the contract was changed on September 28, 1995 and there were no $90 something basis levels in 1996.

Basis levels for new crop at Lloyd are 15 under the November.

Crushers are the only game in town and are buying more grain from the trade than they are from farmers.

Why, because how else can they cash flow their farms when wheat is worth $2.85 a bushel dropped in the pit. If Boone could open his frikkin eyes longer than it takes to get his nose out of Ritter's butt, he would realize the ramifications the CWB has to the total farm picture.

The other reason is some grain companies cash flow requirements. Less margin - faster cash flow.

Until such time as we see some abnormal export demand ie. non Japan, crushers get to run the show.

While i agree the contract is not reflecting vegetable oil values, and have accused it myself over the last two months of "discovering the price where farmers will sell", it will take some exports to get some balance back in the country.

Two grain companies in Saskatchewan had $8.00 specials on canola before Christmas that equated to a $8.00 to $14.00 under basis level, spurred by some Mexican and Pakistani demand.

So if they can do, call it a $10.00 under in Davidson, the difference in freight via rail from Davidson to Portage would be about $15.00 dollars by rail. It should equate to a -25.

This really irked me this week about the contact:

Tuesday the dollar was down 1.2 cents, beans were up 10 cents, oil up 35 points and canola was DOWN $3.50.

Not a very good example of price discovery and yes i am perplexed and not proud of the contract at this time.

[dnach]

Pen-Dale, I sympathize with you, some basis levels are almost criminal this year. But, I would still love to sell/grow Canola in Manitoba any year, $8/bus @ 15bus/ac is still a horrible return for a high input crop like canola.

[TOM4CWB]

Incognito;

It looks to me like the futures are realigning to accomodate a lower (smaller) basis... as Jan delivery comes around... possibly?

2 years of short Canola crops have stressed many parts of our marketing system... the WCE futures contracts are but one example of the difficulty we went through... and are still adjusting to.

Don't be so hard on poor ole Boone... he sure makes us work for our supper... which I for one appreciate!

[Incognito]

Tom:

Strankman is in Brazil right now.

Should be a good source for Asian Rust reports when he gets back this weekend.

Veneman might as well said they were going to ban MBM today at a Congressional hearing - but she didnt.

Market will be very interesting this year - regardless if Brazil grows 60 MMT or not.

[TOM4CWB]

Incognito;

I was wondering when he has going... missing the freezing rain...

Reports are still indicating $10 beans this spring... but maybe only if US dollar drops another 15%?

Corn could be hedge if CDN$ hedge is done for feed barley?

Is $9/bu new crop canola a reasonable #?

[Incognito]

Most ppl i am talking to Tom, see 9.04 as the top for beans.

Canola hasnt been following beans for 4 months - no reason for it to start now unless exports step to the plate and deplete crush supplies