March Canola calls

[AlbertaFarmer5]

Does anyone care to elaborate on how this could play out? If they all decide to excercise their options, they would have to take delivery, is that correct? And why would they not, when they are almost certainly in the money? What other option do they have?
That is nearly $20 million dollars in contracts at todays price at 20 tonnes per contract, that would be a market mover.
Or do I have this all backwards?

[farming101]

Does anyone care to elaborate on how this could play out? If they all decide to excercise their options, they would have to take delivery, is that correct? And why would they not, when they are almost certainly in the money? What other option do they have?
That is nearly $20 million dollars in contracts at todays price at 20 tonnes per contract, that would be a market mover.
Or do I have this all backwards?

Options expire on Feb 19. By that date options buyers that are in the money have to decide whether to offset their position, that is sell their option, or exercise their option where they go long or short the underlying contract(The other outcome is that their option is out of the money and worthless). If they exercise it does not necessarily mean that they would stand for delivery for the last trading day is March 12. They have till then to offset the futures contract they acquire. However the period between the first notice day, Feb 26 and the last trading day, March 12 can be quite interesting.
The Jan 21 contract went up $50 a tonne in the last 2 weeks

[farming101]

The other interesting thing to watch is whether or not the futures price converges as the final trading day draws nearer. The idea is that by the time the last contract is offset, the futures price should equal the street price or perhaps more accurately, what would have to be paid to trade some actual canola on that day within the contract's specified delivery zone.
Any major difference would be a discrepancy and opportunity to profit from arbitrage

[macdon02]

First thing first, need a weekly close, preferably on close Monday, assuming we still trade even though holiday in US, over 725, i show no resistance till 775, 787 and finally 810. These numbers are derived from the low points similar to fibonacci but include an adjustment factor, last i looked, presently 719

[jazz]

101, you are too sharp for me. Short term positive or negative for prices?

[farming101]

This is for the most part playing out in the nearby month. It is not really making for higher cash prices on immediate new sales.
For cash canola off the farm the action is in the future summer months. Prices have gone from offering a premium for immediate deliver to a discount of as much as a dollar a bushel at some crush plant points.

[farming101]

First thing first, need a weekly close, preferably on close Monday, assuming we still trade even though holiday in US, over 725, i show no resistance till 775, 787 and finally 810. These numbers are derived from the low points similar to fibonacci but include an adjustment factor, last i looked, presently 719

ICE canola closed Monday Feb 15

[farming101]

Around Jan 12 the crush margin for the March took a nose dive. It did recover some but has dropped again big time today. Cash prices for Jan/Feb/Mar have not kept up. Basis is as much as 59 under Mar for Feb delivery

[farming101]

All time high for the March continuous tied at 10:30 this morning 744.50 (March 3, 2008)

[farming101]

New record made 746.50 @ 11:28
All time high 749.50 @ 12:00