Canola Technicals

[HFL]

Many, many tonnes targeted at 10 bucks. If it gets there it won't be there for long.

[charliep]

Oliver88

Always curious how farmers include cost of carry in their pricing decisions. What is your timeframe for the $10.50/bu? If someone offered you $10.50/bushel for July delivery, would lock the price in? I ask because I am curious how farmers include interest cost, storage and risk in their pricing decisions.

[tweety]

"Acres will be way down in 2015. Seed sales are low. "

And how did you determine that? Hopeful guess?

[farmaholic]

Here's a thought, everybody should put $11 targets in. See if the price goes PAST $10.

Someone else brought this up a while back.

So now they know the "least" your willing to accept and how many bushels at that price. I still say this effectively keeps them from using the futures market. What did the other fellows say? Free call options? Their work is done, they just have to wait for when the time is right for them to trigger YOUR offer. Your already at the table waiting for them to show up. Ya.....

[farmaholic]

Charlie the interest will be determined if you just putting the money in the bank or need it to pay down debt or operating loans. Storage? John says we get paid for storage, not so much this year (now anyway) there is little carry. Storage risk? Know what you put in the bin. Canola at 7% and cooled is good to go...

I like deferred delivery contracts (canola) everything is known. No "basis games". No futures risk of turning against you and hopefully the delivery period is honored.

[charliep]

Actually I was thinking of a deferred delivery contract. I was wondering if Oliver88 would sign a July based deferred delivery contract that locked in $10.50/bu, would they take it? It may be a weird way of looking at it but I would want to be paid 1 percent a month to store. From my eyes, taking $9.80/bu for a December delivery would pay as well as taking $10.50/bu in July. 7 months at 10 cents/bu cost/month.

[SASKFARMER3]

Talk to your suppliers see how busy they are tweety

[charliep]

I have taken the topic off course because the initial questions were about the short term outlook and where prices are likely to go based on technical signals. I guess the question was do you look at deferred futures months and deferred delivery contracts to achieve a target price.

[farmaholic]

10000 bu @ $9.80 is $98000

10000 bu @ $10.50 is $105000

$105000 @ 1% = $612.50 (Lost interest 7 months not compounded)

$105000 - $612.50 = $104387.50

$104387.50 - $98000 = $6387.50 advantage of July contract.

Did you need the money for anything else other than stashing it in the bank at 1%?

Don't know if I should have taken the interest cost off the $9.80 or $10.50 price.

[farmaholic]

Yes Charlie and that makes me a hypocrite.