Canola

[macdon02]

1256 new resistance level, courtesy of the quant. I got the above listed 599 and 608 as buy levels. Also a $2356~ target, yes that's $53/bushel as resistance. 2356 popped up back in Late july and i thought it was full of shit, but the drought got worse, it hadn't really rained since, and inputs are getting more scarce. There's no time limit on it but in my opinion we are in a 8 yr drought lining up with the solar cycle and global cooling, the inverse or the flip side of the previous 10 year wet. Be very phucking careful pricing. Feb looks like closest turn point, expecting a high. This is a long ways from over. Only a monthly close under 599 would get me bearish. Somebody shut up the covid threads.... we got $ to make, the kind you retire on.

[macdon02]

As a side note, I'm waiting on $25 futures for hard red. It's close. The downside is gonna be dollar, CAD is gonna thrive on oil strength, yeah we got an idiot but it's relative, there's no shortage of those. We trade as a commodity currency, amen.

Ps, "close" means this crop year, out to July '22

[AlbertaFarmer5]

Thanks for posting. I can't find it now, but you threw out some very lofty ( by the standards of the time) canola targets a year or more ago, and have been vindicated since then. I might have thought you were crazy at the time though...
I require some translation.
I assume the prices are per 10 tonnes? But why is the yearly upside below any recent price?
Do the percentages indicate the probability of achieving that level?
A negative percent would seem like a very safe bet if I read that right.

If these projected prices are as the result of inflation, then is it really practical to expect to use the proceeds to retire on? Won't the inflation overwhelm the savings? Or are you expecting inflation to be very temporary?

[furrowtickler]

Thanks Macdon , interesting thread 👍

[SASKFARMER]

I agree on the cycles. We were wet for 15 years before that it was neutral and before that, it was a dry cycle. So either neutral or dry coming. I would tilt to dry. 3/10 in Sept and 3/10 in June and July don't make a big crop.

Also, Crush plants make money lots of money.

Don't think so they pay for them in a very short time.

[jazz]

Has anyone booked canola seed yet? Because from what I see thats the only input that hasnt gone up massively. Tells me less acres going in next yr likely.

The demand picture is pretty vague as well. I mean we have 2 yrs of much reduced production, low carryout, another potential drought and some new local crushers added to the mix. It certainly could skyrocket in price.

The big caveat macdon is if we get another GFC in short order.

[Guest]

thanks macdon , deep for me , but so much nicer than the ones that tell us to sell, sell, sell
lots of facts , wished i understood it better!
there was a fella on here a while back that sold 60% of his new canola at $19, i think

[macdon02]

AF5, the decimal is missing, completely. It's a quirk. I asked to get it fixed and it completely skewed the charts. Ive been using this since late '16. It works. The numbers are based on fibonacci +/- an adjustment factor, i have no idea what the adjustment is but fib is relatively close, closer than any other system ive come across. When highs or lows are produced in a chart, it creates the resistance or support for "the pendulum to swing". If you think of charts and markets on the principal of physics, they make more sense. This entire oilseed rally is due to govt regulation on the feedstock for diesel and jet fuel from 2024 forward...... and the drought. We are killing our export markets and could turn into an importer. While they have us fighting over "stuff" the landscape of agriculture is being drastically modified without so much as a wimper. In my mid 40s im looking at retirement at 50 and on to something else. This will kick and the average person is likely going to be growing their own food when this is said and done. They are sitting at home anyhow. The trend is the exodus of the cities, it's only begun and is reminiscent of the term suburbia. If this 30% reduction in fertilizer use gets implemented it's gonna get real sketchy feeding everyone and getting them the skills to feed themselves. Regulation is causing the supply chain disruptions and those disruptions have the capacity to fuel civil unrest. Fat kids don't riot. It's a very grey area whether this is pandemic response or climate change policy. Remove the narrative and what do you see? I see cc policy. I can definitely see a reversion back to the early 1900s farm model, a little bit of everything running around and trading with the neighbors.

[AlbertaFarmer5]

Thanks for the explanation.

Fundamentally though, how can canola get that far detached from the competing vegetable oils? Or is the entire complex going the same direction?
I can maybe see a short covering situation where it could get to unsustainable levels very breifly.

On the other hand, if it is still dry by spring, and inputs are still through the roof, and the once bitten twice shy farmers are still gunshy to pre sell anything, the market may see the need to get to much higher levels to incentivize production.

[furrowtickler]

Sure making a run today

[AlbertaFarmer5]

Sure making a run today

Watching the action while canola has been stuck in this range for months, it sure looks like there is extreme pressure each way, and once it breaks out either way, it will be epic. Is this the breakout.

[shtferbrains]

Someone pointed out that if it continues dry in the spring Canola will be the crop insurance crop of choice due to the higher coverage.

[jazz]

I don't know about that back to the land movement macdon. As we have seen this past year the average person doesn't have the skills or resilience for that.

Most will be content with rationing and UBI.

Appreciate your perspective but you have some macro trends rolled in there that are pretty uncertain.

[AlbertaFarmer5]

Just thought I would bump this thread back up again. Where Macdon's suggested $53 per bushel canola is a possibility. After correctly forecasting the current price range
Given current events, this doesn't look as crazy as it did back in October.
Does anyone still keep in touch with Macdon?

[SASKFARMER]

I think we could see 30 some time but grain companies will hit basis to take that away.