"Spring harvest" - the wildcard

[jdepape]

Just updating my canola S/D. I had factored in 250,000 tonnes of production lost due to an inability to harvest everything that is still out in the field.

Figuring on about 750,000 tonnes still in the field. My 250,000 loss is - in my mind - low. It could be a lot higher. Also, a great deal of this canola will likely be worthless because of a chemical change to the oil (according to a long-time crusher buddy of mine).

My carryout is hovering around 1mmt right now. If I'm low on the spring losses, then the carry out gets smaller, maybe a lot smaller. Huge impact on things.

Would like other's thoughts.

[bucket]

It takes a rocket scientist six months to figure this shit out?

The collusionary efforts of graincos and statscan to revise production to control so called market forces is criminal...

Comments are not pointed at jdepape. ...just those responsible for presenting alternative facts.

[Oilking]

It won't be a very good day for the big speculators that are short in this market. I think a " bear trap " is being set up. Just my gut feeling. When the tide turns, look out !

[jdepape]

It takes a rocket scientist six months to figure this shit out?

The collusionary efforts of graincos and statscan to revise production to control so called market forces is criminal...

Comments are not pointed at jdepape. ...just those responsible for presenting alternative facts.

Good thing I'm not a rocket scientist.
Afraid I don't subscribe to your vitriol. Don't misinterpret simple human error (or incompetence) with malfeasance. For what it's worth, the mistake I indicated elsewhere would have supported prices, if it had any impact at all.

And besides, what CGC or graincos are reporting has nothing to do with my question about what will be harvested this spring.

What's the word out there? Hopeful? Or doubtful?

[dmlfarmer]

Good thing I'm not a rocket scientist.
Afraid I don't subscribe to your vitriol. Don't misinterpret simple human error (or incompetence) with malfeasance. For what it's worth, the mistake I indicated elsewhere would have supported prices, if it had any impact at all.

And besides, what CGC or graincos are reporting has nothing to do with my question about what will be harvested this spring.

What's the word out there? Hopeful? Or doubtful?

And what are you willing to pay for this information. Why do you expect farmers should provide you with supply information for free. Information has value as your recent posts demonstrate. Annoys me that farmers are expected to give out stock information for free, yet pay big money to get S/D information from advisors. Plus real information we need such as price at port not available at any cost

[jdepape]

And what are you willing to pay for this information. Why do you expect farmers should provide you with supply information for free. Information has value as your recent posts demonstrate. Annoys me that farmers are expected to give out stock information for free, yet pay big money to get S/D information from advisors. Plus real information we need such as price at port not available at any cost

What do you think your "supply information" is worth? What would you charge me for it?

I'm really just asking for an opinion - what is an opinion worth? Mine or yours?
After all, it's just an opinion. It's what you do with a broader understanding of the market that is valuable.

I share my opinion - freely. Take another look: I figure there is 750,000 tonnes of canola production still out in the field. I figure 250,000 may not be harvested - maybe more. And that what is out there may be useless anyway. I shared my estimated carry out. I'm suggesting it could be smaller.

And if I get a better understanding of what is likely to be harvested, I will share that too.
Maybe that's worth something to you. Maybe not. It's really what you do with it that matters.

Yes, I'm an advisor - of sorts. I have developed a hedge program that works very well. It adds material value to my farm client's bottom line. We call it AGP - for Advanced Grain Pricing.


Using an average basis of 22 under, the program for this crop year is sitting at cash sale value of $500/tonne ($11.34/bu). That's practically the highest average price all year - on every tonne of canola in our program.

What is that worth?

[URL="http://http://www.farmcocanada.com/risk-management.html"]http://http://www.farmcocanada.com/risk-management.html[/URL]

[Cattleman]

John, were you the one on here, defending wheat basis calculations in industry? Basically saying that changes in the Canadian dollar was "included" in the basis? Thus it was ok to subtract Canadian dollar prices from US dollar futures? Not sure how you think you can have any credibility from farmers when you were defending yours, and grain companies, total disregard for mathematical and economic principles. Namely, subtracting numbers with different units (i.e. US dollars and Canadian dollars) and simple economic principle of Purchasing Power Parity. Kind of funny to see these responses. If I sign a basis contract with a Canadian packer, I know exactly what the basis is, and what the impact of currency changes will have on my price.

[Guest]

Just updating my canola S/D. I had factored in 250,000 tonnes of production lost due to an inability to harvest everything that is still out in the field.

Figuring on about 750,000 tonnes still in the field. My 250,000 loss is - in my mind - low. It could be a lot higher. Also, a great deal of this canola will likely be worthless because of a chemical change to the oil (according to a long-time crusher buddy of mine).

My carryout is hovering around 1mmt right now. If I'm low on the spring losses, then the carry out gets smaller, maybe a lot smaller. Huge impact on things.

Would like other's thoughts.

John , nice to hear someone on the other side make comments like that . Local elevator told me price would tank when this bumper crop of canola comes in in may. What a crock of shit and they tell you that like your some kinda idiot. Right to your face . We had 30 ac flax left before shitshow hit last fall . Our flax went from 25 bpa #1 (325 gm/half lt) to 245 gm/half lt of #3 shit that noone will even buy at (14bpa) in 41/2 weeks. Gonna be some long speculating faces with sore bums when this unfolds if theyre bankin on this shit. People have left flax out here lots and ended up with #2 good flax other years

[bucket]

Flax crop is at least 30 percent overstated. Dockage is higher....seed is lighter...it all adds up.

And yet stats can has 2 years to get the numbers right.

I agree with depape occasionally and the reporting systems are ****ed in Canada.


We as farmers supply growing season reports for free...the least the industry could do is supply better info as they find it.

[the big wheel]

And crop insurance is counting this big payout come spring???

When in fact most are already over coverage if they harvested any amount in the fall. The major loss that's coming isn't going to be a burden to crop insurance as much as farmers.

But right on. Got the drills ready.

[jdepape]

John, were you the one on here, defending wheat basis calculations in industry? Basically saying that changes in the Canadian dollar was "included" in the basis? Thus it was ok to subtract Canadian dollar prices from US dollar futures? Not sure how you think you can have any credibility from farmers when you were defending yours, and grain companies, total disregard for mathematical and economic principles. Namely, subtracting numbers with different units (i.e. US dollars and Canadian dollars) and simple economic principle of Purchasing Power Parity. Kind of funny to see these responses. If I sign a basis contract with a Canadian packer, I know exactly what the basis is, and what the impact of currency changes will have on my price.

I think "explain" is a better descriptor of what I was doing than "defend".

The grain industry in Ontario has been setting basis this way for waaay longer than I've been around. There they trade corn, soybeans and wheat - all with futures in USD - and all with cash prices in CAD. and every one of them set their basis as simply the difference between the cash price (in CAD) and the futures price (in USD). Here's a description of Ontario basis I found on the internet:

"Some people might say it's a moving target because the local cash price for corn, wheat and soybeans is the futures price adjusted for different factors such as the value of the Canadian dollar, freight, handling, storage, quality and localized demand."

Also, this way of pricing CAD-priced crops with USD futures is covered in any ag commodity trading course with the Canadian Securities Institute (the place where everyone in the financial industry takes their certification courses).

They do it this way because it makes things simpler. That's it. No malfeasance or "disregard for economic principles". Just like with your cattle pricing example, if you have a wheat basis contract with a buyer, you know exactly what the basis is (as with your cattle contract) and what the impact of currency changes will have on price (the difference is the impact of a change in FX does exactly nothing with the wheat contract, because you have locked in the FX by locking in the basis). When you hear futures are at X, you know exactly where you stand without having to do any FX math.

The price ends up being the same either way you calculate it. (It has nothing to do with Purchasing Power Parity or any other economic law/rule. It is simple math.)

[blackpowder]

One gets a headache trying to understand wheat basis beteeen the various companies. So different. Some wont even tell you. So tired of wheat. Doesnt matter I guess. If you like price sell some. Some people should go incognito to various companies and try it. Selling wheat I mean.
Canola. Not an authority. One local co here saying lock the doors shes going up. Whatever. Canola out yet look a lot worse in last 2 months from road anyway. Dogs breakfast for sure. But whatever was there in Oct count ×.6 - .5 ?

[Cattleman]

You missed the point John on a couple levels. Just because they have done it this way from before your time does not make it correct.

Your last statement is incorrect. If I do a basis contract on cattle when the dollar is 75 cents, if the dollar goes to 74 at delivery my Canadian price absolutely does change. If I am basing my price in the US market, I should be paid appropriately.


Additionally, "the price remains the same either way you calculate it" is further incorrect because if you lock in a basis the way the grain industry does it, and the dollar goes from 75 cents to 74 cents. I may get the same "Canadian dollars" but in the scenario with a 74 cent dollar, when I go to buy a piece of equipment in the US, I do not have the dollars I should have if basis was applies properly. Please explain how pricing a commodity off an American market has nothing to do with PPP. As an actual business person, it absolutely has to do with PPP.

[farming101]

Regarding spring harvest no one knows. wait and see
But if spring harvest canola is important to ending stocks/use it could get interesting
Anything less than 1 MMt carryout would put the canola program in limp mode till new crop

[Cattleman]

John, I would like to get your take if you really think the system is fair? You say it is basic math....

Well I have 10 US Dollars, and 80 pesos. Can I have $90 please. That is the math you are doing. The obvious rule of basic mathematics applies here, that you can't add and subtract different units, but you are defending... I mean explaining that this is legitimate?

Thanks.