Canola,,, where we a goin' ? ? ?

[beaverdam]

We going to top out in the 4teens or we goin' up into the 6teens, or just where are we going, this thing is starting to go wildcat !

up $9.00 this morning, oil up over a cent !

I don't know, but I'm guessing there hasn't been "good weather" in SA over the holidays.

In my farming career, these are getting to be historic "farmgate" prices.

But what I think primary producers often forget, is that today more than ever,,, the "ingredient" they produce, makes up an historically small portion of the cost of the end retailed product.

ie; Remember when they told you there was only 3 cents of wheat in a loaf of bread that retailed around 2 bucks or so.(the ratio is, I'm sure, even smaller now days)
Farmers could have been paid five times more for their $5.00/bus wheat, and the end consumer wouldn't have noticed.
So after saying that about wheat, where can canola go? (yes I know the relationship between canola oil isn't the same as wheat and bread) Still it doesn't invalidate my question,,, what top farmgate price is reachable?


enjoy the ride

[errolanderson]

For new crop hedgers . . . .

November canola 540 put options traded under $19/MT today. Nov strike price $540/MT - put premium $19/MT = $521MT ($11.81/bu) - fall basis = guaranteed floor price.

Holders of puts of all the upside should new crop canola blast higher into next fall. But if it doesn't. the price shield of the put guarantees an attractive floor price without production or delivery obligation. No risk of margin call . . . .

[farming101]

Patience will be required on the fall basis part of that plan.
Offers right now are very near -50 in some parts

[SASKFARMER]

I want 16 for the last half. 705 a ton min basis.

[canolacrazy]

I want 16 for the last half. 705 a ton min basis.

I think you'll get it.

[errolanderson]

Patience will be required on the fall basis part of that plan.
Offers right now are very near -50 in some parts

Wait on the basis . . . just get the puts. This rally is providing excellent pricing opportunities. Once it breaks, everyone may be looking back and wishing they had . . . .

[ajl]

Basis: Depends which futures months they start using, or do they have any relevancy in this type of market?

Quite a spread between July and Nov. Currently about $618 versus $544

If they're using July futures with local offers for Sept at about $11.25..... wow that's quite the basis!

Sept price will be off the Nov '21 futures. Local basis is around 0 for old crop but returns to around a typical 30 under for the new 2021 crop months.

[beaverdam]

MAR soy oil was up as much as 1.67 cents(from previous close),,, now down 0.40 cent(from previous close)
Over 2 cent swing today,,, so far.

[bucket]

Devils advocate and I know its January....never lost a crop...

There is nothing in the tank ...rain is the only crop production possibility ...if there isn't adequate moisture ....

Is there a 15mmt tonne crop in the making for 2021???

Just thinking of other possibilities...and to plan accordingly with plans B C D....to Z

[fjlip]

Wild swing in trade, way off highs ATM, 10:58