How much more upside in Beans and Canola

[boarderbloke]

anybody with unpriced canola? just looked at the weekly chart and it seems we're finding support at previous highs. a very good sign i think. particularly with Crude Oil dropping so hard earlier in the week. also, crush margins are continuing to increase!
How does anyone else see it?

[boarderbloke]

meant, support found at previous highs on the Monthly chart.

[classicalliberal]

An idea might be to buy some at the money put options against the july if you thought it could go higher which would protect the values now (minus the premium) but allow you to participate in any potential upside. I think fundamentals might be on the wrong side depending on weather issues this summer.

[charliep]

Don't know but will throw in my two on a marketing question.

1) South American soybean production is lower than expected. Harvest progress is ahead of schedule from my memory of newsletter so is becoming a firmer number. This fact and continued gov't/farmer issues in Argentina is pushing customers (China) to the US and tightening the end year carryover.

2) Battle for acreage including both price and seeding delay considerations is playing out. How many more soybean acres in the US?

3) Weather and yields will come into play over the summer like every other year.

4) Overall economy and impact on commodies. Impact on meat consumption and from there livestock protein feed disapperance?

5) Likely to have a sniff at $10/bu across the prairies over the next month and a half. If haven't already done some pricing, should be tempted. If not, spend the money on some minimum price type contracts. Options (puts), Alberta SPE, grain company minimum price contracts, etc.

What are others thoughts/factors they are following?

[charliep]

Point 5 is new crop by the way. Will leave the investment decision on old crop to discussion. Is your money better in the bin as physical commodity or stored in the bank (based on the assumption you have operating debt paid down and that your borrowing for new crop inputs has a lower interest cost that your expected extra mony from the market by holding in the bin).

[boarderbloke]

does anyone think there could be a 'surprise' to the 'higher side', with regards to 'canola planting intentions', in the Stats Canada numbers tomorrow??? it just seems that they've been talking about the 'big plantings' and 'big crop' for 2009 for the last 6 months! I just don't see how there could be a surprise to the higher side, I think tomorrows numbers will be neutral, and if there will be a surprise, it'll be to the lower side of estimated acres planted to canola.
But with StatsCan anything is possible.

[boarderbloke]

I suppose Charlie another you might add to your list could be, continued rains in Australia. I don't think it'll take long to start factoring that into the price here (regarding new crop)