Canola Puts

[farming101]

Veg oil market might have another run at higher prices...

Would have paid well to be long since about end of May.

Chinese canola oil futures up 28% since end of May.

Western Canada canola up about 5 %.

Trickle down is working good.

[beaverdam]

Corn belt drying up and potential hurricane moisture fading away.

https://www.barchart.com/story/futures/grains/144956/rally-caps-are-on https://www.barchart.com/story/futures/grains/144956/rally-caps-are-on

[TechAnalyst]

[ATTACH]6536[/ATTACH]

Veg oil market might have another run at higher prices...

Would have paid well to be long since about end of May.

Chinese canola oil futures up 28% since end of May.

Western Canada canola up about 5 %.

Trickle down is working good.

[ATTACH]6535[/ATTACH]

WHAT?

When I was trying to present the optimistic side in a pessimistic market I believe the phrase was "If you can't stand being bearish just buy some calls."

Hmmmm...

[errolanderson]

Growers . . . keep your guard up. Global economies are far-from-healthy. Markets may be quite different by mid-fall.

January canola $500 put options may trade for $12/MT = $488/MT ($11.06/bu) minus post harvest delivered basis.

Stay disciplined with marketing. Don't follow the market money until it runs out . . . .

[farming101]

WHAT?

When I was trying to present the optimistic side in a pessimistic market I believe the phrase was "If you can't stand being bearish just buy some calls."

Hmmmm...

We can use all the optimism we can get!
However, it's always good to temper the giddy moments with a dose of what if?

If I remember the comment about buying some calls was in reference to the corn market.
Corn fell about 10% from early July to early Aug. Could have made a few bucks on some puts I guess

[errolanderson]

We can use all the optimism we can get!
However, it's always good to temper the giddy moments with a dose of what if?

If I remember the comment about buying some calls was in reference to the corn market.
Corn fell about 10% from early July to early Aug. Could have made a few bucks on some puts I guess

Biggest positive news has been the recent pickup in China purchases of both soybeans and corn. Talk of tensions easing between U.S. and China . . . I doubt it. Corn recovery has been quiet impressive. ProFarmer cutting Iowa yields and talking of a 177.5 bu/acre average, well below USDA latest is also supporting recent gains.

Needed rain appears heading into the Midwest soon via incoming hurricanes. Many analysts stateside suggesting to growers . . . sell the carry. March corn trading about 25 cents/bu above September right now.

My two-bits worth, corn and bean rally may still have some legs left, but overbought signals starting to flash . . .

[bucket]

Biggest positive news has been the recent pickup in China purchases of both soybeans and corn. Talk of tensions easing between U.S. and China . . . I doubt it. Corn recovery has been quiet impressive. ProFarmer cutting Iowa yields and talking of a 177.5 bu/acre average, well below USDA latest is also supporting recent gains.

Needed rain appears heading into the Midwest soon via incoming hurricanes. Many analysts stateside suggesting to growers . . . sell the carry. March corn trading about 25 cents/bu above September right now.

My two-bits worth, corn and bean rally may still have some legs left, but overbought signals starting to flash . . .

Errol....a question...

Anyone monitoring Canadian sales of grain in any kind of open fashion that the USDA reports daily?

While I realize the pricing model comes from the american market wouldn't it be prudent in a so called "open market" in Canada that sales reporting of Canadian grain would help the farmers, graincos, etc make for a more efficient system??????

Monster crop but no one knows how its moving or where or when....has 2013 disaster written all over it...except for not much else is moving on rails ...

[TechAnalyst]

We can use all the optimism we can get!
However, it's always good to temper the giddy moments with a dose of what if?

If I remember the comment about buying some calls was in reference to the corn market.
Corn fell about 10% from early July to early Aug. Could have made a few bucks on some puts I guess

I find the suggestion my analysis is needing to "temper the giddy moments" as insulting.

I am so sick and tired of farmers being fed a constant barrage of "what if" with no one having the guts to present the other side of the story for fear of looking like an idiot. There are at least two sides to every market remember, a bullish case and a bearish case. In today's snowflake environment, no one is willing to go out on a limb and point out the bright spots. I don't care so I try to be suggestive that there is another side.

If you review my comment again, you may agree that it was very timely and potentially accurate. It may have given those that have to buy feed grains a great opportunity to do so during the post USDA report test of contract lows. It also may have given some the confidence to hold off selling at 14 year lows.

The USDA's annual final seeded area and June 1st stocks reports were released this morning.

The most significant number was the final seeded area estimate for corn being only 92 mil ac compared to 97 mil in the March estimate and a survey range of 94 to 96 mil ac.

That significantly changes how sensitive the corn market and thus the grains overall will be to weather for the remainder of the crop year.

Using all of the previous USDA figures, such a seeded area would leave a carryover of 2.324 bil bu compared to the June estimate of 3.323 bil. That is using a yield of 178.5 bu/ac. For demonstration purposes, if the yield ends up the same as last years 167.8 bu/ac, the ending stocks will fall to just 1.390 bil bu. That would be the lowest since 2013/14 when prices traded in the $4-5/bu US range. It also shows why the increased sensitivity to weather developments ahead.

Another factor likely to come into play is the near record net short position of the money managed funds. They are net short 277,479 contracts or 1.387 bil bu (vs a record of -322,215) and they have just been informed their is a much smaller crop than they were trading on. Short covering on their part could result in a short term rally, especially if China does any significant buying for their phase 1 commitments.

In short, one should expect a short term rally on these developments. Anyone looking to make feed grain sales should monitor the situation closely for signs of it ending.

[farming101]

Hi TechAnalyst, I sent you a PM

[bucket]

Interesting coments about seeded acres ...now how does the derecho episode fit into the math of 37 million acres affected?

Wouldn't that be a black Swan event usually?

Just asking because my marketing knowledge is looking at the prices every morning....

I think we are in a subsidized colluded market and until there is a shortage that this derecho event might force...the market will be set by government subsidies in the states....and might be even with it....

Neither vying for the president's job are going to leave farmers in the Derecho path of destruction nor the people in hurricane Laura's mess without some help....

In Canada the governments are more than happy to shit on farmers....and it doesnt matter which party....

[farming101]

It erecting comets about seeded acres ...now how does the derecho episode fit into the math of 37 million acres affected?

Wouldn't that be a black Swan event usually?

It would seem evident that the derecho wind that hit Iowa and also other states was the trigger for the latest rebound in corn prices. Storm date was Aug 10-11, corn prices began to rise Aug 12.

Corn condition in Iowa has tumbled from 73% good to excellent in early August to 50% G-E in the last report.

One estimate says 200-400 million bushels could be lost? This would not include stocks damaged or lost from storage that was destroyed.
https://www.thegazette.com/subject/news/business/derecho-latest-test-for-farmers-in-trump-country-20200823 https://www.thegazette.com/subject/news/business/derecho-latest-test-for-farmers-in-trump-country-20200823

The latest WASDE issued before the storm was forecasting a national corn crop of 15.278 billion bu

Noteworthy is the drop in corn use since the pandemic started. Estimates of Mar - May corn disappearance is the lowest for this quarter of the crop year since 2012-13.

[Oliver88]

Errol....a question...

Anyone monitoring Canadian sales of grain in any kind of open fashion that the USDA reports daily?

While I realize the pricing model comes from the american market wouldn't it be prudent in a so called "open market" in Canada that sales reporting of Canadian grain would help the farmers, graincos, etc make for a more efficient system??????

Monster crop but no one knows how its moving or where or when....has 2013 disaster written all over it...except for not much else is moving on rails ...

Viterra is predicting 20MMT production for canola. This equals 44.5 bpa.

Reasonable?

[bucket]

Viterra is predicting 20MMT production for canola. This equals 44.5 bpa.

Reasonable?

Dont know but what is on their sales book?

It's mandatory in the states to report their sales...

[macdon02]

https://pbs.twimg.com/media/Eg7lc3SXgAEUqgc?format=png&name=small

Maybe ....

[biglentil]

Viterra is predicting 20MMT production for canola. This equals 44.5 bpa.

Reasonable?

Some coming off now 25bpa canola around here, stand is shit and pods half full. Good news no sprayer ruts.