Canola

[farming101]

Talk becoming common of tighter carryouts.
Domestic disappearance record pace, exports have taken off after a slower start

Back on Jan 16 I guessed 1.4 MMT ending stocks
Well AAFC came out with 1.1 MMT as their latest guess. Wow
If weekly disappearance throttles back to 2015-16 pace it still doesn't cut it
So what will happen?
-Likely there is more canola stocks than thought
-countering the above is that some is compromised by heating or still out in the field
-Soybean and bean oil prices drift lower putting a cap on canola prices? Possible
-CAD tracks higher capping canola prices? Possible although I'm thinking CAD is likely to go sideways
-May contract corrects and 12 buck seeding time bids appear by early April? Possible
-Price rationing starts so as to stretch supplies? Possible
-Crushers shut down? Quite possible although I think they will try not to

Anyone want to add further thoughts and possibilities?

[Wheatking]

-Crushers shut down? Quite possible although I think they will try not to

Anyone want to add further thoughts and possibilities?

I have a feeling they would rather shut down then narrow the basis. I am guessing this is going to be the summer of maintenance. Canola acres are going to be "Huuuuge", what else pencils out as a profit next year. Crushers will try to get by on the bare minimum crush to keep margins high because they know with the expected crop coming there will be ample supply come sept. Add to that the huuge Soy crop coming in the US, not sure what the price of canola will be, but barring a weather disaster the basis will be wider then this year.

[Guest]

something real different around here is the soybean acres that are going to get seeded. this is way north of traditional areas for beans , but sure going to steal some massive canola acres around here .

[fjlip]

Soybeans up in US, if another RECORD crop, ya prices will be just great...

U.S. farmers will likely boost soybean acreage to a record 88 million acres this year, said U.S. Department of Agriculture Chief Economist Robert Johansson at an annual conference Thursday. U.S. farmers this year are expected to sow 90 million acres of corn, down 4.3% from 2016's 94 million acres, he said. Farmers will probably plant 46 million acres of wheat, down 8.3% from last year's 50.2 million acres for a third straight year of declines, according to Mr. Johansson. The USDA's projections are based on government analysis rather than a survey of farmers.

[Wheatking]

something real different around here is the soybean acres that are going to get seeded. this is way north of traditional areas for beans , but sure going to steal some massive canola acres around here .

Doubt it steals canola acres. I have a feeling for every acre of soybeans means one less of a cereal.

[Oliver88]

Could soybeans could cut into cereal and canola acres?

Instead of a cereal-canola rotation will we see a cereal-canola-soybean rotation?

[MBgrower]

Beans could very likely be trading in the $8's this spring if usa has good weather. Canola basis may improve but futures could be way down.

[HappyFarmer]

I think shutting down a crush plant is not as easy as one thinks. They all have agreement to ship so much with rail, with serious financial impacts if they don't. Crush margins are down but still good. Crop size I was never in the camp like sf3 of a 16.9 crop....even 18.3 was small...and I think these demand numbers prove that. Bean oil chart scares the crap out of me a bit but I think we see 12.00 and higher mid may and forward. Would not surprised me at all to see a may /july inverse sometime in the next few months.

The veg oil demand story is the real deal IMO.

[farmaholic]

.....I'm turning purple holding my ****in breath. I hope I don't pass out waiting!

[iceman]

You guys may be very well right on seeing $12 in May.
Is another $20mt worth the risk with beans being the 800lb elephant in the room?
As much as I want to believe there will be a shortage and crushers will have to pay I just can't see it happening.

Just MO

Iceman out