Canola growers, it's time to pay attention to new-crop canola prices, especially in a year of very high old-crop canola carryout and pretty large US old-crop bean carryout.
Yesterday Nov 05 canola closed at $300.90. It's up another $3.30 this morning at 8:42 a.m. New-crop beans are unchanged to slightly lower. Soyoil up a smidge. Canuck Buck down 1/3.
From a straight price-risk management point of view, in my opinion, anything over Nov $300 is a pricing opportunity.
Here's one suggestion:
1) Price 5% at first opportunity over $300.
2) Add another 1-2% at each $1/t move above $300.
3) Get to 15% or more priced by $310 to $312.
If fall basis levels are bad (and I haven't checked lately to see what they are) sell futures. If fall basis good, use a DDC.
Other's thoughts?
Yesterday Nov 05 canola closed at $300.90. It's up another $3.30 this morning at 8:42 a.m. New-crop beans are unchanged to slightly lower. Soyoil up a smidge. Canuck Buck down 1/3.
From a straight price-risk management point of view, in my opinion, anything over Nov $300 is a pricing opportunity.
Here's one suggestion:
1) Price 5% at first opportunity over $300.
2) Add another 1-2% at each $1/t move above $300.
3) Get to 15% or more priced by $310 to $312.
If fall basis levels are bad (and I haven't checked lately to see what they are) sell futures. If fall basis good, use a DDC.
Other's thoughts?
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