Am I the only one,marketing.

[farming101]

Mallee, must be very frustrating not to get canola shipping going in SA.
Two ships for March/April on the shipping stem. Is that right?
European futures are at about 770 AUD for the May contract....

I read an article where a farm in NSW pulled off a 7 tonne crop. Wow
https://www.graincentral.com/news/dual-purpose-canola-crop-breaks-australian-record/ https://www.graincentral.com/news/dual-purpose-canola-crop-breaks-australian-record/

[farming101]

Does anyone write OTM calls on deferred months in a market like this to hedge new crop? As a way of protecting some costs or locking in a margin?

A friend of mine did this but I always lacked the nerve.

To be low risk you would want to have some assurance of having actual bushels to back that option up. If prices go north and your option you sold is nominated for exercise it can get expensive

I wonder if your friend also bought an ATM or near the money option and then sold/wrote OTM to lower his cost?

[SASKFARMER]

We are waiting for a bit till June. Stay tuned either I got this or I got this. Canada and the USA are dry. let that sink in.

[burnt]

To be low risk you would want to have some assurance of having actual bushels to back that option up. If prices go north and your option you sold is nominated for exercise it can get expensive

I wonder if your friend also bought an ATM or near the money option and then sold/wrote OTM to lower his cost?

IIRC, he was doing some spreads in some cases, but seemed to be comfortable with naked contracts, in some market circumstances. Perhaps as in now, when prices are very strong. But still, extreme volatility can make it extremely interesting...

He did know his stuff better than I did, and I stayed with buying options.

I remember his comment was - why not write them? They pay you.

I would think his margin account wold have to be quite significant. Overall, he did very well so his methods were obviously not all stupid. Hard to argue against success, but sometimes there is much more to it than what is known.

[Rareearth]

Mallee your comments and thoughts are actually very important to help understand the markets. When our markets get slammed, it can be unnerving, and that’s the job of the market, to establish price ranges. To see Ausi market is stable, with the same exporters that we have I think is very telling. Thank you keep it up 😊

No one has mentioned the canola exchanges. Is there enough volume, is it used enough by the buyers, exporters and farmers to be a fair representation of the cash market? Seems like there is a disconnect between cash spot markets and the futures price. Some buyers change the futures months plus or minus basis while others use different months. They don’t all use the same futures month to offer spot prices. Etc

Any way in volatile markets I like to phone and talk to buyers with our targets, his insights and thoughts, no targets or basis commitments. I HATE basis contract as that’s a gift to the buyer that knows what volume is coming in for which month. They know the exact contracted volume and price as well as other volumes not contracted yet. I feel the same for price and volume target prices. A dream for a buyer.

[Old Cowzilla]

Lots of black dry ground showing up here lately and it's going to be a lot harder to fake a big crop unless we get a major moisture event in the next 60 days. BUT when that weather pattern breaks we all know who really pays for it. The market guys just don't know where to put the money these days so they chose food.

[tubs]

Mallee I think we were in the same boat in 2008 our basis was terrible because nobody could get shipping because trains were moving oil.

[malleefarmer]

Mallee, must be very frustrating not to get canola shipping going in SA.
Two ships for March/April on the shipping stem. Is that right?
European futures are at about 770 AUD for the May contract....

I read an article where a farm in NSW pulled off a 7 tonne crop. Wow
https://www.graincentral.com/news/dual-purpose-canola-crop-breaks-australian-record/ https://www.graincentral.com/news/dual-purpose-canola-crop-breaks-australian-record/

Been the case for a while China controls shipping worldwide according to some in the game. They want cargoes in or out they get em rest of world waits at times. Then you guys have weather issues physically getting ships in and out to add to problems

[blackpowder]

Basis contracts can be shitty yes.
They have uses tho. Don't discard them completely.

[malleefarmer]

Re my wheat contract I spoke about earlier.
Vessel due early to mid March.

But still questions if they have enough containers.

Somehow gonna try to get first in line.

[blackpowder]

Dumb question. How much of aus crop relies on containers?

[malleefarmer]

Dumb question. How much of aus crop relies on containers?

Bugger all for wheat barley but legumes a lot I’d say.

Bulk shipping and containers short here.

Always premium price in container trade what ever the commodities