Sell canola buy calls?

[MBgrower]

with 13.00 canola who needs to complicate things with options, just sell the cash.

[Oliver88]

Here's the flip side of the coin . . . .

Store cash canola and purchase put options as price protection.
Advantage of this is; the grower can wait on basis premiums potentially offered later in the crop year.

March canola: $570 put @ $15/MT . . . . $560 put @ $11/MT . . . . $550 put @ $8.50/MT.

May canola: $570 put @ $18/MT . . . . $560 put @ $14/MT . . . . $550 put @ $10/MT

July canola: $570 put @ $24/MT . . . . $560 put @ $19/MT . . . . $550 put @ $15/MT

I could see a put option working well for new crop canola.

[errolanderson]

I could see a put option working well for new crop canola.

Totally agree . . . .

A November canola 2021 $520 put is now trading @ $20/MT. This guarantees $500/MT ($11.35/bu) canola minus your fall '21 delivered basis with no production or delivery obligation.

[farmaholic]

Totally agree . . . .

A November canola 2021 $520 put is now trading @ $20/MT. This guarantees $500/MT ($11.35/bu) canola minus your fall '21 delivered basis with no production or delivery obligation.

A $40/tonne fall vulture basis will really cut into that plan.
Hope to sign a cheaper basis contract before delivery.....but that commits you then.
$10.45 is nothing to write home about.
With the potential for very little carry out.... I would think fall prices wont be much different than the above example.
All hypothetical of course.

Or the put expires worthless and $0.45/bu on how ever many tonnes you were trying to protect just got flushed down the toilet.

"Insurance".....