Canola market?

[furrowtickler]

Are we going to head into a dive tomorow after last weeks gains? Alot of canola was priced thursday and friday from what I hear. The basis dubbled friday afternoon at a local elevator.

[TOM4CWB]

Might this help?

http://news.tradingcharts.com/futures/3/5/75774353.html

"WINNIPEG, MB, Feb 20, 2006 (Resource News International via COMTEX) -- The following is a collection of opinions of traders at the Winnipeg Commodity Exchange and Canadian Grain Industry representatives.

Winnipeg, MB, Feb. 20, 2006 (Resource News) - Commodity funds at the WCE are rolling their positions out of the nearby March canola contract into the May futures. However, the outright trade from the funds has been light, as they are still thought to be holding large short positions.

While canola futures have started to turn higher, moving to the top of their well established trading ranges, the funds have not been covering their shorts in any sizeable manner.

A broker thought canola prices would have to move higher still before the funds would come into cover. "The last time they bought, prices were over C$250 in March," he said. As a result, the broker expected it would take a close above C$250 in the March contract, or C$258 to C$260 in May to trigger the funds. "I don't think they're in any hurry," he added.

"They're just rolling them," said the broker. He estimated that the funds were now net short about 2,500 May canola contracts and 5,000 March. The broker expected the funds would complete the roll out of the nearby month over the next week, as first deliveries are looming on March 1.

Market players normally follow the activity of the commodity funds with interest because it is felt a position of 10,000 contracts in a single month is enough to independently move the market."

[charliep]

I always like to read market analysis/reports after the fact (a healthy dose of reality for those of us in the business). I then look at the charts as the acid test of accuracy.

To call canola a snoozer now would be an understatement - particularly when you pull up a soybean chart. With a $10/tonne trading range, there is likely more variability in basis than there is in futures.

[GrainVac]

The basis doubled likely due to elevator pricing rolling from March futures to May. Check and see what the spot price actually is, it hasn't changed in our neck of the woods. Only the May carry has been added into the spot basis as May is still long way off

[melvill]

Good point GrainVac. Here in Alberta, one company (which shall remain nameless to protect the less than innocent) reports their spot basis and basis contracts for March delivery as so many dollars under or over the March futures. They're also reporting their basis contracts for May delivery as just a few dollars under May futures. Makes their basis look extremely good compared to other companies.