Canola, How low will it go?

[nw9flynn]

Canola seems to have dipped to new levels on all months today.

I believe the final production estimate is due out tomorrow.
Will it drive prices even lower or are most traders already come to terms that we are dealing the a 9MMT crop? Or are we due for even more losses tommorow?

I'm begining to believe that we will see a canola price in most areas that begins with a $4.??/bu.

What does everyone else think?
Is everyone already sold? What are your marketing strategies for the upcoming months?

And please TOM4CWB and Vader do not make this forum into a debate on the CWB. You both make good points but lets keep this about canola.
We have enough threads debating the CWB already.

[AdamSmith]

The monthly charts on my DTN go back to June 1992. Nearby Canola posted a low in July 2000 @ $241t and a low again in Nov. 2004 @ 243.2t.

Today's low was $240.60.

The 2000 low was a dish bottom that after several months turned into a bull market that took prices to $368t by july 2001. That bull market ended in April 2004.

It's been a downward slide since then.

My best guess is that we will be building another dish type bottom in which demand can build and supplies shrink in order to start a new long lasting bull market.

A bottom will be put in eventually.

We may even be seeing it today.

But until new demand appears, I suspect that we will continue to trate sideways to lower. At least for a few more months.

Whenever things look dismal. I always look at the long term charts and they show that the market will go back up again.

The million dollor question is when.

[sverchomin]

Recently attended a Informa outlook. The message their was a low side of $5-30 short term and $300 upside long-term. Not to bright in anyone's books.

[TOM4CWB]

nw9flyn;

Where do you project the CDN$ is headed by Sept 1/06? .92?

Almost $100/t exchange difference between the low in the CDN$ and now. Add another $35/t lost by this time next year?

I would be surprised to see Canola go under $210/t.

[charliep]

Wouldn't second guess canola lows.

I was going to put in a suggestion of sell the rumor/buy the fact after today's Statscan report but the monster 9.7 mln tonne crop is going to be a shock. Average canola yields were 32.6 bu/acre (37.9 AB, 31.5 SK and a lousy 25.7 MB).

CBT soyoil also started to collapse yesterday. The loonie is also headed higher.

[nw9flynn]

Tom,

I think you are right when you talk of a CDN 0.90$.

Does anyone have any experience with call options on the CDN$?

I will be gone for a day or two and will not be able to check this site.

I look forward to everyone's comments when I get back.