Durum and canola contracting.

[newguy]

Noticed that the month that is further away usually the contract prices move up in price.This year they either stay the same or drop.Does this mean companies want it all now ? If so I would think not a lot of risk in not being in holding out for a couple months till the first surge of contracts get out of the way and companies have to move up prices to get more grain from the bins.

[Guest]

market was inverted all last year also

[GDR]

Feed grains also. I would actually prefer a world where spot price is decent and they will take delivery, which is basically where we are at. However, being as it is not the norm I'm not real sure how to market. I suspect that they are hoping to buy marketshare now, not sure that helps the buyers later on but think it is a bit of situation of trying to panic guys into selling. Who in their right mind would forward contract grain in the bin for less money? If no supply offered why isnt that bringing forward months up?

[Old Cowzilla]

At this stage next years crop has not been made or lost so buyers already are starting to price for a normal crop. The only thing holding guys back from selling now ( who had a crop ) is the thoughts of holding a $30 canola ticket.

[newguy]

market was inverted all last year also

Durum market last year for what I remember thet always paid a bit for the longer you wanted to store it.

[AlbertaFarmer5]

Feed grains also. I would actually prefer a world where spot price is decent and they will take delivery, which is basically where we are at. However, being as it is not the norm I'm not real sure how to market. I suspect that they are hoping to buy marketshare now, not sure that helps the buyers later on but think it is a bit of situation of trying to panic guys into selling. Who in their right mind would forward contract grain in the bin for less money? If no supply offered why isnt that bringing forward months up?

It seems to me that they are backing themselves into a corner. With the backwardation in most of the grain markets, none will be contracted for future months within the current crop year. Nothing is going to change on the supply side before new crop.

So everything will be delivered as soon as possible, then when late winter and spring into summer roll around, there will be nothing on the books, and very little supply left. This might work for feed grains that can be replaced with corn, but good luck sourcing the crops that are grown almost exclusively in western Canada.

[Sodbuster]

If your not in need of cash flow you could sell your canola now under Nov futures and roll your contract just before it expires to the next month or when inverse is high and keep rolling. If you had done it last year, there were months that had $$150+ inverse between months. If done right last year you could of achieved close to a extra $400 a tonne assuming you still had not sold or if braver do it all on paper. Disclosure, past performance is not indicative of future performance , trade at your own risk.

[GDR]

It seems to me that they are backing themselves into a corner. With the backwardation in most of the grain markets, none will be contracted for future months within the current crop year. Nothing is going to change on the supply side before new crop.

So everything will be delivered as soon as possible, then when late winter and spring into summer roll around, there will be nothing on the books, and very little supply left. This might work for feed grains that can be replaced with corn, but good luck sourcing the crops that are grown almost exclusively in western Canada.

I agree but that could still go 2 ways. Either they pony up and pay more and holding crop works or they cancel trains and boats and shut down crushing capacity and then holding crop loses you money.

[Agvocate]

If your not in need of cash flow you could sell your canola now under Nov futures and roll your contract just before it expires to the next month or when inverse is high and keep rolling. If you had done it last year, there were months that had $$150+ inverse between months. If done right last year you could of achieved close to a extra $400 a tonne assuming you still had not sold or if braver do it all on paper. Disclosure, past performance is not indicative of future performance , trade at your own risk.

That works as long as you don't contract with Richardson Pioneer, they wont pay the inverse, they pocket the inverse themselves.

[Bushpusher]

That works as long as you don't contract with Richardson Pioneer, they wont pay the inverse, they pocket the inverse themselves.

I rarely deal with them anymore after figuring how much they pad their pockets. After 5 years of dockage discussions and being told “you must’ve hauled a bin bottom” when I didn’t. Always lower protein there too. Take a sample in harvest and they’re not bad but start hauling and somehow the grain lost protein in the bin lol.