New crop canola

[melvill]

Hi, cottonpicken, I know that if the Canuck Buck drops to 80 cents, and nothing else changes, we will have higher Canadian prices for our products. However, that begs two questions:

1. Do we know for certain that the Canuck Buck will drop below 80 cents U.S.?

2. How do we know that, in that same time period, commodity prices, in general, will not have fallen making $8.00 canola a pretty good price?

The answer is, of course, that we don't know the answer to either question. So then, as a risk management, not risk-taking, strategy, why isn't pricing some 07 canola, say 10 to 15% of expected production, at eight bucks, not a good idea? If the market goes up, price some more and raise the average.

[cottonpicken]

The answer is actually some people do know the answers to these questions.
The u.s dollar is on thin ice and once it hits .80 on its index it loses all technical support .A major drop will then occur driving the cando up towards par. and commodities higher.This is what has been happening for the past 3 years.
What is causing the dollar drop?Its deficits for one thing.

[melvill]

Okay, so now I understand you better. You weren't talking about a 80-cent Canadian dollar you were talking about the U.S. dollar dropping to an index of .80 against all other currencies. Is that right?

If I understand you correctly, that would mean that the Canuck Buck would rise in value against the U.S. Buck. If that happens, all else being the same, we'd expect the Canadian dollar value of farm commodities to be lower not higher - even more reason to pre-price some of the 07 canola at eight bucks a bushel.

[carebear300]

Thank you all for your insights I really appreciate the opportunity to benefit from your experteise. Take care everybody and good marketing.