Will new crop canola go to Carry?

[rain]

I am surprised at new crop canolas' strength yesterday.

Do you guy thing we will loose the inverted market we have and go the carry?

[charliep]

Will Canadian canola production be under 6.5 MMT or over 7 MMT? If canola production expectations are lowered (either by less acres than expected or weather), then I could see new crop going to carry. As long as new crop production outlook looks large, then an inverse will likely remain in place (that is of course assuming no production problems in the US mid west).

Others thoughts?

[crusher]

There is lots of volatility and it could go to par or carry for a brief time. Last time I looked, the crushers were still crushing heavy, and exports were moving right along. Crush margins are still huge, Cnd $$ is down, both lead me to believe the market will be supported. One newsletter I receive suggested funds were very overweighted to the long side and are now getting their positions more reasonable.

Rain, if you were hedging on your Nov sell the other day, great, but I'd sure would be cautious if you were speculating.

Just got to love these markets even though I'm trying not to add up my losses this week. Time to go hedge the Canadian $$.

[rain]

Unfortunately I lifted my short November position on the open yesterday. Sure wish I still had it. Oh Well

[charliep]

Knowing where to put stops (if at all if a 100 % hedge) is one of the biggest challenges facing anyone who deals with the futures market. I have my own story I could tell but would require everyone to listen to a lot of snivelling/whining.

How do others approach stops on hedge positions? In theory, you shouldn't. My idea (open for discussion) is to make this decision at the time you maket the trade: i.e. Plan A -I will make the margin calls/carry the hedge or Plan B - if the market goes beyond $XXX, I will get out. The choice relates to your overall market strategy.