Argentina’s 2016/17 soybean harvest not going to be that big!

[farming101]

Everything else equal if Argentina comes in 7 MMT under the Jan17 WASDE what does that do for world ending stocks?

Add total oilseeds ending stocks for 2014/15 and 2016/17 and there is actually a drop of nearly 8 MMT
Beans will be in demand.
Should be total oilseeds, meal and oil stocks

[errolanderson]

bucket . . . unless I'm interpreting your question wrong, there is no way of knowing the return on your price protection as the market is always a moving target. Put options may expire worthless, which is the best case situation as that suggests cash price rose. You would lose the say 50 cents/bu but sell into the higher cash market. If Nov canola drops to $440/MT, your put options would kick in value. Lets say you own a $480 put option . . . you would be $40/MT in the money - your premium = about $25/MT return. This is horseback arithmatic.

bucket . . . maybe this is a better example.

Say you buy a Nov 480 put option for $20/MT in March

$480 strike price - $20/MT premium = $460/MT floor - your expected fall delivered basis = expected net return. That is your expected fall price protection using puts only.

[SASKFARMER3]

Sitting in line waiting on delivering a Xmas contract! CN showed up with work crew I smell a train!
On canola yea I can lock in $11.50 dropped in Cargill pit fall for soy! Canola 10. Yea the boys know it will go to the USA unless it's the same!

[blackpowder]

I would happily pay an affordable price for fire insurance and never collect.
Option spreads when doable only on unpriced same thing.

[farmaholic]

Hmmmm. look at it this way. That 50 cent premium on a 40 bushel crop is $20/ac. That fifty cent option premium on a $10.50bu is 4.75% of it's value and everything else also has to be paid for out of that $10.50 bu as well.

So do I want to spend $20/ac and have another "insurance" expire worthless? Whose to say the option doesn't expire worthless "at the money"(if that is the proper phrase) and little to no gain has been made above the floor price I'm trying to protect. I guess if you're ok with that there's nothing wrong with it.

Your best insurance is self insurance. Operating on the edge? Can you afford a hit? Everyone's circumstances are different that is why it isn't fair to say these strategies should never be considered.