Canola

[mcfarms]

Thanks Lee
I may just phone you and drop by sometime I'm, not all that far from Brooks.
I've got some other stuff on the go I wouldn't mund some input on too.

[kenzie]

$6.00 is do able. Canola was $6.11 delivered to Crossfield 10 days ago. Here is a thought , do we producers have to change our price point of reference? Remember that $6 Canola was worth 25% more 2 years ago.
The Canola Council is calling for 10mmt of production to sustain the input,export and technology sectors of our business. So $4 bu to the producers right. How about sustaining the farmer?

[melvill]

The canola council isn't calling for 10 mil. t over night. Besides we probably couldn't increase production that much in a year or two. I think they're suggesting that, with proper market development, (especially including varieties that produce high stability oils) as the members of affluent societies of the world recognize the importance of moving away from hydrogenated oils, there's room for more canola production.

In addition, we (canola growers) had wonderful opportunities to forward price a portion of the 2004 production at prices considerably above current cash prices. I'm continuing to get calls from producers who are almost in panic mode because they've got none of the 2004 crop priced. I really wish more producers would use hedging (with futures) instead of forward pricing through the trade to manage price risk. Using futures doesn't require delivery if production is low quality or reduced.

By example, had a call from a producer the other day who forward priced 1/3 of his production at well over $8/bu using futures and an estimated basis of $15 under. He added some more as the summer progressed. Even with 30% unpriced, his average price for 2004 production will be well over $7.00. His next step is to sell the last of his cash at today's very strong basis levels and buy paper canola. He wanted to pick my brains about timing that. Of course, I can't give him an exact answer but he's thinking hard.

Pencil farming pays! (End of sermon.)

[lohner]

Hopefully, now that I'm beyond 40, I'm mature (crazy) enough to use a trading account properly. I signed $0 basis contracts.
Shortly after pricing an amount I went long July at the market.
I know I need $7 to break even. If I own them for 18 months so what.
Historic downside risk $20/t.
My brokers won't use canola options. I won't either.
Choose a broker that doesn't go trawling. (stir activity in idle accounts)
Took me afew courses to learn. An Edmonton broker has an upcoming course @UofA extension. 1 day I think.
So hopefully No more unintentional speculating.