Canola

[FarmJunkie]

Glad your back Macdon. Thanks for input. One of the ones that makes sense on this site!

[FarmJunkie]

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.

Bigger problem Jazz will be getting enuf Liberty or Rup. These guys are a bunch of tools. Apparently they can’t get one ingredient to make the stuff so production is way behind. If u planning to grow some get the chemical for it before u seed it.

[AlbertaFarmer5]

Glad your back Macdon. Thanks for input. One of the ones that makes sense on this site!

Sorry for the confusion. This thread is from october, I just bumped it up thinking it maybe relevant given recent actions. MacDon is still awol.

[ajl]

Still have a few unpriced bushels. Watching the futures jet higher but with the widening basis the cash price does not beat my previous $24 sale, which I am hauling this Wednesday. Wish I went for a basis contract 2 weeks ago. The export market has disappeared at these price levels and crushers are not bidding aggressively trying to pretend that they are fully covered. Should be a pricing opportunity left before new crop.

[Rareearth]

Whats wrong with basis contracts:

- completely managed and manipulated by the company offering them

- for the farmer its speculating on what the company’s profit margin will be, or its market position (demand or lack of demand for internal company operations - they go to extreme measures to hid this from competition, farmers and their customers

- is a indicator of the lack of competition ( the higher the basis = higher company profits)

- once a basis contract is signed ( thats the same as a delivery contract) you must deliver to that company

- there must be a business model for smaller independent companies to buy (or broker ) delivery for farmers agains futures. This might be the only way to force futures liquidity, price discovery etc

- does anyone believe the ice futures are a true price discovery tool, hedging mechanism?
Are volumes and liquidity enough, transparent etc?
- ill use this example:, if your at a bull sale in Regina( or any other auction, bull dozer/art etc ), and a bull sells for a record price is it the best bull, The one that sells for the highest price?
Not always, especially if its friends, business partners, or even competitors (with side agreement- next sale you buy my bull). Bidding it higher, world records etc, ill leave it at that - things aren’t always what they seam.
- feels like the canola market

Export sales would help provide clarity, and show risks for the market, and farmers

[AlbertaFarmer5]

Still have a few unpriced bushels. Watching the futures jet higher but with the widening basis the cash price does not beat my previous $24 sale, which I am hauling this Wednesday. Wish I went for a basis contract 2 weeks ago. The export market has disappeared at these price levels and crushers are not bidding aggressively trying to pretend that they are fully covered. Should be a pricing opportunity left before new crop.

I delivered some on a basis only contract a month + ago. Rolled and waiting patiently now.

Must not be very common, at least at this location. The buyer had never done one before.

Everything else I will wait for $52, I'll let Macdon be the greedy one to get the $53.

[Ronski]

Abertafarmer5 What is a basis only contract? How does it work? (and thanks for a marketing post)

[Guest]

I delivered some on a basis only contract a month + ago. Rolled and waiting patiently now.

Must not be very common, at least at this location. The buyer had never done one before.

Everything else I will wait for $52, I'll let Macdon be the greedy one to get the $53.

your balls must be huge have had mine booted in too many times
got some $25 apr canola and some $27.32 non Gmo picked up apr/may, the morning the physco attacked . i am amazed at that. sold some $23.54 immediate del canola also

[AlbertaFarmer5]

Abertafarmer5 What is a basis only contract? How does it work? (and thanks for a marketing post)

If the futures brace for that month was $10. And the basis was -$1, then the cash price would have been $9 if I sold that day. But there is the option of locking in only the basis or only the futures portion of that price. And not getting paid until walking in the other. I could have locked in the $9 and then waited and if the bases improved to only $0.50 I could price it that day and get $9.50 instead of $9. Alternately I could lock in the $1 basis and wait to see if the futures price should improve to $11. In which case I would get $11 minus $1 for $10 all together. Except when they roll the futures from one month to the next there is an administrative cost to that roll, and when it rolls, if the next month is lower than the first month you lose that amount as well. Which is almost always the case.

[Ronski]

If the futures brace for that month was $10. And the basis was -$1, then the cash price would have been $9 if I sold that day. But there is the option of locking in only the basis or only the futures portion of that price. And not getting paid until walking in the other. I could have locked in the $9 and then waited and if the bases improved to only $0.50 I could price it that day and get $9.50 instead of $9. Alternately I could lock in the $1 basis and wait to see if the futures price should improve to $11. In which case I would get $11 minus $1 for $10 all together. Except when they roll the futures from one month to the next there is an administrative cost to that roll, and when it rolls, if the next month is lower than the first month you lose that amount as well. Which is almost always the case.

So you delivered canola and took the basis that day or you already had a basis locked in? And you did not get paid upon delivery so you are speculating the price will rise more than the rollover cost? It does take storage risk off the table though, and hauling in -39 or +10 mud.

[Sodbuster]

Had crusher pick up my $25.00 and $25.50 last Thursday for May delivery, still have a $26.00 target to hit. After that is hauled out I might have a few gambling bushels left. I still think $30 is a possible, especially if we are dry in May or all hell breaks out in Ukraine.

Wheat still sitting in the bin, no targets in as of yet. Thinking wheat might have to buy some acres away from canola and pulses. SCIC coverages for most grains fair excluding HRSW, if I was playing the crop ins game I wouldn’t be planning wheat, maybe the sleeper for next year.

[TOM4CWB]

Had crusher pick up my $25.00 and $25.50 last Thursday for May delivery, still have a $26.00 target to hit. After that is hauled out I might have a few gambling bushels left. I still think $30 is a possible, especially if we are dry in May or all hell breaks out in Ukraine.

Wheat still sitting in the bin, no targets in as of yet. Thinking wheat might have to buy some acres away from canola and pulses. SCIC coverages for most grains fair excluding HRSW, if I was playing the crop ins game I wouldn’t be planning wheat, maybe the sleeper for next year.

Not much moral hazard in SK @ $750/t and AB @ $720/t Canola.

Both SK and AB are at $320 2CWRS... when we can price $400 fall delivery.

[wheatking16]

I wrote about the Saskatchewan Canola basis yesterday.


https://klarenbachgrainreport.substack.com/p/canola-basis?utm_source=url

[furrowtickler]

Had crusher pick up my $25.00 and $25.50 last Thursday for May delivery, still have a $26.00 target to hit. After that is hauled out I might have a few gambling bushels left. I still think $30 is a possible, especially if we are dry in May or all hell breaks out in Ukraine.

Wheat still sitting in the bin, no targets in as of yet. Thinking wheat might have to buy some acres away from canola and pulses. SCIC coverages for most grains fair excluding HRSW, if I was playing the crop ins game I wouldn’t be planning wheat, maybe the sleeper for next year.

Oats guarantee here is $100 /ac over HRSW .
We are in same boat on Wheat , still in bin but I doubt it will hit over $13 , they just keep widening the basis

[beaverdam]

Does anyone have the breakdown on Ukraine's tread of crops? Do they grow canola? Do they grow mostly wheat?
I'm getting a strong feeling this morning that Ukraine farm land might not get planted this year due to the following reasons.

- because the country and the men are in the middle of war?
- because Ukraine men refuse to plant crops on behalf of Russian occupiers?
- because supplies aren't available?
- because devalued money can't purchase supplies?
- because land is damaged or infrastructure/roads or equipment is damaged?
- because if Russians plant the crops they won't know the land,,, or care very much?
- because if some crops are planted, none will be exported beyond Russia or Ukraine.