Targets

[BTO780]

How many put them in and do they actually trigger?
I have done it and have basically quit doing it. Seems like a complete waste of time. It only gives buyers the indication of what we will give our grain away for. Also, tells them to some extent the quantity.

Buyers encourage us the throw targets in I think only to really benefit them. I’ve found only time it triggers if the spot price gets to your target .. whoopty doo.
I know of a guy whose target was .12 above the spot price and they wouldn’t pick it up. Absolute joke!!

We all need to put the same targets in (but that can’t work) because they pick the lowest ones and those will trigger ... if they ever do.

I was told I had a “reasonable” target on a recent commodity only to have it expire. There was no shock to me it did that.

Good ol grain companies playing games. With the short crop this year you would think they would be hungry for product. Oh right, it’s all about their margins, or whatever other excuses they can dream up.

[beaverdam]

Never used Targets much,,, but one time I did put in a Target, the Street price triggered it and then just kept going higher. That was years back when canola was like 9.50, I put in a target of 9.75 and it ended up reaching 10.20 or something like that.
Generally, I'm a patient spring or summer seller of canola, and often hold my stocks tighter as the price rises, so that choked me by missing out on another .25 or so, and that was the last time I used Targets.
(funny how recent price moves make my story sound like chump change, but back then, .25 was a nice bonus)
I agree with you about holding information on your own stocks, close to your chest.

[AlbertaFarmer5]

I have found the only way to get the best price of the time period is with targets. Can easily get 10 cents above posted price by having a target in when futures briefly get that high throughout the day. 10 cents isn't a big deal at todays values, but in a typical flat market, that is significant.

I've often had a target hit well above the days highs, because " the buyer reached out and grabbed some targets well above the market".

Edit, I'm not referring to putting in far fetched targets far ahead of time, I usually wait until the market is close to where I want to sell, then put in a series of higher targets, and see how many trigger.

[furrowtickler]

I have found the only way to get the best price of the time period is with targets. Can easily get 10 cents above posted price by having a target in when futures briefly get that high throughout the day. 10 cents isn't a big deal at todays values, but in a typical flat market, that is significant.

I've often had a target hit well above the days highs, because " the buyer reached out and grabbed some targets well above the market".

Edit, I'm not referring to putting in far fetched targets far ahead of time, I usually wait until the market is close to where I want to sell, then put in a series of higher targets, and see how many trigger.

We have had some success like this as well , but also had targets within $.05 not hit
Depends on if they have a train to fill during that period it seems most of the time

[mcfarms]

Quite often we separate futures and basis and put targets on each , on canola for sure this has worked well as many of my 'out of the money" targets hit in the overnight trading period. Id be curious now that I think of it to see how many times the futures have peaked in the overnight market.

[fjlip]

Have made a few CENTS and lost $$$. Luck is the biggest factor, dumb even better.

[Old Cowzilla]

Best I have ever done was $0.50 over street price on canola only to watch it drop a buck for a month. But that was when there was canola in the country a couple of years ago. Seems like different rules now and once guys get tired of this game they come up with some other wacky way of getting your grain.

[helmsdale]

peas at $1 over just triggered this morning.

durum at $0.40 over triggered immediately last week.

In the past, I've straight up asked the merchant, "what's been triggering?" This year, they seem slightly more reserved, but in the past, I've NEVER had a trigger expire. Max was peas at $1.25 over posted last year, most of the time, there's at least $0.50 to be had.

[BTO780]

peas at $1 over just triggered this morning.

durum at $0.40 over triggered immediately last week.

In the past, I've straight up asked the merchant, "what's been triggering?" This year, they seem slightly more reserved, but in the past, I've NEVER had a trigger expire. Max was peas at $1.25 over posted last year, most of the time, there's at least $0.50 to be had.

You are fortunate.
I’m on my second go around for a pea target ... don’t ask me why. Put it $1 above. If it hits I will be a big believer in targets. 😂😂😂
It’s unfortunate China hasn’t been a bigger player in peas like last year. Who knows where prices would be. There won’t be many peas left come end of Feb- Mar.

[Rareearth]

Grain bid prices are comprised of futures prices and basis .

Not sure who tracks basis levels, I’ll use canola as a example. Highest basis if i remember right last year was about .70 cents per bushel, currently the best is about .30 cents per bushel.

Wouldn't crushers or exporters just use in office premiums/or basis specials to buy the canola in the local market vs trickle in sales based off of futures and farmer physiological or cash flow needs?

With the low volume of canola available now compared to last year, looking at last years basis compared to now, shouldn't basis levels be much higher than they are now? Maybe .50 cents to much higher $1.50 is where basis should be, reflecting drought year, demand, inflation, etc?

Currently I'm not getting that warm feeling that the exporters truly want the canola. Or are they letting the market adjust to the new reality, where supply is limited, and it will take time for the consumer to adjust to the new reality? This requires slow and steady , more difficult to purchase, vs out right just doubling or tripling the price.

Then the crystal ball view, drought odds for 2022 look exceptionally high. Will crushers wait and step up in April or May and secure raw materials or gamble- hope for lots of acres and a average crop so price relief can take place?
If i owned a service station, and my fuel tanks we empty, i would do what ever possible to refill those tanks to keep the service station going. Vs closing down, laying off employees, income loss-bills to pay, etc

Same principles apply to other crops as well.

[Robertbarlage]

$10 buck oats for next year? Screw canola!

[shtferbrains]

Read yesterday 43% of Soy oil goes to biodiesel. Rising quickly.

Ethanol plants were losing money in August but are now running near record profits and running full out. Over $3 gal and big demand for byproduct corn oil and distillers.

[Rareearth]

Robert good point,
Haven't heard much on this for a while, but corn and soybeans used to compete for acres and they did this with futures prices as part of the acre buying.

The same will happen this winter and spring in western Canada, for all crops which will be very interesting and maybe even exciting. Hope it rains.

[Rareearth]

Is Vit always a $1.00 per bushel less than other buyers of canola, or are they buying for others and will truck it to them later?