Whats up with Canola Crush

[rain]

Does anyone know whats up with canola crush. Numbers are a little lower then I expected.

[Incognito]

Little oil sales. Crushers near covered for July/August - last week was a good indication.

Soon they will widen out the basis and price off the November.

Bottom line - they dont need it.

[rain]

How do you know oil sale are low?

[Incognito]

When everyone was speculating why crush was down the previous week, did you phone any crush plants to ask why?

[rain]

Incognito:

No did you?

[Incognito]

ya...

Interesting to watch the guys on DTN thinking that a crusher had a major breakdown...

Most companies need seed for the FH August then look for new crop basis levels to take effect - and they are bantering 50 dollar basis levels come October given a normal crop.

Late Friday, ADM did widen out and start pricing off the Nov.

[rain]

Incognito:

You said oil sales were low. Did you confirm this? If so where?

[charliep]

Any thoughts about how we talk/deal with wide basis levels such as you are proposing? Does this mean futures prices are too high? What does it mean for someone who wants to hedge using futures versus deferred delivery contracts? Basis risk is almost more than futures risk. The switch to electronic trading and potential on trading volumes (unknown until the industry is well into it) adds a new level of uncertainty.

Any thoughts on ensuring the integrity of the canola market as we move ahead that provides at least some element of visible pricing/measure of value?