Canola Inverse

[errolanderson]

Opening my big mouth again thay I should probably keep shut more often, but bare with me . . . .

Example . . . growers are being offered say $30 over March or $35 over July. Why not book the March and then invest the portion of the inverse into call options? My thinking is you will get the cheque, cut your downside risk, but still be on-board should canola blow higher due to spring weather problems.

Growers believing there may be a 'pot of gold' into crop year end if you are the last one to sell physical canola are taking on a big risk (IMO).

[vvalk]

What does the size of the brazil crop really
matter? They only have logistics to export so
many soybeans no matter what the size of the
crop is. The world will have to buy so much
from the USA every month no matter what. That
is why old crop will have to move higher

[errolanderson]

vvalk . . . not trying to stir the pot too much, but cheaper South American crop entering the global markets will kill demand for American soybeans before crop year end.

Just look at what happened to the cattle market this week. Ten days ago, this market was bulletproof. Just buy cattle and then go directly to the bank was the advice of many American analysts. They just got their ass handed to them.

Demand is everybit as important as supply for price discovery.