Rolling the canola basis?

[Hopperbin]

hmmm, spouse and the cat aside, now what to do with the basis contract?

[farmaholic]

Bin Hoopered (tongue in cheek)
Canola seeded spring of 2010
Canola harvested fall of 2010
Canola Basis contract signed
Canola pricing opportunities missed
Canola Basis contract rolled
Canola Delivered against Basis contract
Canola priced up to December 2011
COULD BE UP TO 1 1/2 YEARS BEFORE YOU GET PAID SINCE THE WHOLE PROCESS STARTED!!!! Sounds a bit like selling Board grains in Western Canada!! Just kidding, but it sounds eerily similar. At least it was by your choice.

Rolling to the positive basis isn't a bad thing if cash flow isn't a problem. You said you can still eliminate the storage risk by delivering this March. Then the only risk is the futures values falling even further. Good luck deciding!

[Hopperbin]

Give a joke get one back. farhollic if you signed basis after harvest and delivered then rolled are you not better off now than if you priced at harvest?

[farmaholic]

Hopperbin
Your right, In the March contract, even after the slump($44.00/tonne) in the market over the last few days your still nearly up $100.00/tonne over the price on Oct. 4/10 which was about $478.00/tonne(likely with a negative basis at the time). Even if you rolled to Nov/11 for the extra $12.10 positive basis at yesterdays close of $563.00 you would net a little over $13.00/bu. Still respectible. I still think this thing is going to recover, but it may be a slow choppy climb.

[Hopperbin]

The come back today relieves some pressure, my current mar. del. basis is 23 under. gives me a price of 12.83 per bushel. At that level I will price it, just in waiting mode now.