Originally posted by Marusko
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Sell canola buy calls?
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Originally posted by jamesb View PostFor regular options a account with a brokerage. A simple way to do it is option- like product that many of the grain companies have that is essentially an ability to capture a run up in price in the future. In my experience they are real easy to buy but are more expensive than using a standard put or call.
Also graincos don't usually offer ways to stay in the market after the grain is gone. They're after the handlings
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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
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Originally posted by errolanderson View PostHere'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
Also, it is cheaper to go direct and use your own commodity trading account.
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$13.00 is available. it's a no-brainer. if no need for cash right now, sell 50% now and let the other half ride till spring. if there's bills to pay, go to 75% sold.
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Originally posted by errolanderson View PostHere'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
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Originally posted by Oliver88 View PostI could see a put option working well for new crop canola.
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.
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Originally posted by errolanderson View PostTotally 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.
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".....Last edited by farmaholic; Nov 19, 2020, 12:24.
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