Canola 2007 Risk Management... The AUSIE Experience 2006

[cottonpicken]

So all this froze 04' wheat i'm stilling sitting on was a risk because i didn't sell?Or was the really risk selling at those ridicuolusly low prices?I would say my perspective is different because i think/know that we are about to have once in a generation super spike in prices and selling one year out in these conditions is WRONG no matter what spin you want to put on it."risk managemet" is almost an oxymoronic statement when applied to farming.It's the riskest business to be in.As for canola-do me all a favor,go to barcharts.com,goto soyabeans,go to the monthly charts,consider what has happened in wheat[goto the monthly wheat chart if need be],now ask yourself are we going up or down.Is the risk selling or waiting?

[Lifer]

In hindsight the largest risk with your frozen wheat was having it freeze (this being all I know about your 2004 wheat). I also assume you did everything you could to limit this risk.

I do not "know" that we will have the price opportunity you tell of. I gather the charts are telling you this. I thought that charts were one part of the equation.

What I do know is my major costs for next year, my 5 year average yield. I also know that crush capacity is increasing, major food companies(Mcdonalds, KFC) are using canola more, and I have customers that want to work with me.

I am unclear as to everything that contributed to these price changes.

I am reluctant to hedge or price 2007 Canola at this time. I am unclear what basis will do and am reluctant to commit at the levels talked about.

Nov 2007 at $360 is a profitable position (even with a $20 basis)for my farm. Why not hedge a percentage now though?

[cottonpicken]

You havent heard of the frost of 04?
The charts are a very small part of the equation,fundamentals are way more important.As far as forward selling do it i dont want to change yours or anyone elses mind anymore.The fundamentals i spend my days pondering have never been mentioned on this site so i'm not going to bother talking about them.But one thing is true -when oil was 27$ i posted it was going to 50 and everyone thought i was crazy, when the canadian dollar was .67 i posted it was going to par and everyone thought i was crazy.The factors that drive our markets are infinitley complex and tough to understand.Not everyone can be a Buffet and not everyone can be a mechanic AND I AM ONE SH#TTY MECHANIC. But i do understand macro economics.
You never heard of the frost of 04?

[Lifer]

"The frost of 2004" affected area I am in. I can't remember how wide spread it was. We lucked out with very little damage and ended up able to move all of our wheat in the CWB grades. This in part because of the varieties we grew.
You had wrote to luck at the charts. I couldn't see how this supported the conclusion implied that the market was going way up. What I did see was the Nov 2007 and 2008 Canola price was in a high range relative to the monthly chart.

[rainman]

CP, where is the best place to look for basis levels from the past and other market indicators on canola?

[TOM4CWB]

Rainman;

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agc8645?opendocument

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agc6756?opendocument

Hope these give a perspective for you!