Weather

[Zaphod]

So you can change the weather, can you? Wow, you've got way more influence than I thought. Frankly, I like to avoid pricing during a weather market. The guys who held their canola through the fall of 2004 got absolutely slaughtered because they listened to weather forecasts.

[LWeber]

Dont be ass re. changing weather BS.

While you are right that it puked in the fall of 2004 - cash prices also rose 75 cents in the days after the frost.

It froze Aug 19, 2004

AUG 19 2004 - CNL LLOYD - $8.25
AUG 20 2004 - CNL LLOYD - $8.45
AUG 23 2004 - CNL LLOYD - $8.75
AUG 24 2004 - CNL LLOYD - $8.90
AUG 25 2004 - CNL LLOYD - $8.75
AUG 26 2004 - CNL LLOYD - $9.00
AUG 27 2004 - CNL LLOYD - $8.75
AUG 30 2004 - CNL LLOYD - $9.00
SEP 15 2004 - CNL LLOYD - $8.00
SEP 30 2004 - CNL LLOYD - $6.51
OCT 30 2004 - CNL LLOYD - $6.53

[cottonpicken]

I thought I was caught up swathing I guess ill push it and keep going

When there is doubt there is no doubt

[Zaphod]

Relax about the joke.

Take a longer look at the canola chart. Canola was already heading south as part of a larger market move and most people saw it. The frost happened and the market screamed higher, but that's because no one sold the rally. Everyone held on because they put too much weight on the weather (which is actually my point). After farmers and buyers figured out the actual impact (huge yields with crappy quality), the selling began and prices didn't recover for two years.

The lesson is that people forgot the bigger market picture, and got so bullish that they didn't capitalize on the one-week rally. Yes, we will get a frost at some point and the best odds are right around the long-term average date of the first frost. That doesn't need a fancy weather model to predict it. Besides, do you buy, sell or hold into a frost scare? Which is the best move? In 2004, selling would have been the best move, but nobody did it, including me. But I learned not to over-react and look at the big picture.

[LWeber]

There are some who have locked in positive basis levels ( 5.00 to 15.00 November)and are waiting to sell futures after the frost - learned a lesson as we all did in 2004.

Thats easier to do if you still have canola left in the bin.

The bigger picture is still demand and where the seed will come from fill that demand.

Carry at 1.25 to 1.5
Crop at 9.5 to 10 regardless of quality

leaves a supply of 10.75 to 11.5

how do you export 6 and crush 5?

if it does freeze dock/waste climbs

soybeans this year are diff than 2004
China still a wildcard
India too

those new crush plants might want to start building at 1/2 throttle....

[Zaphod]

No arguments there. Canola will be tight. The US bean crop is the other big factor and the market can't seem to decide if it will be big enuff. I think that's why we're heading sideways for now. I know, I know, that depends on the weather.

[mbratrud]

Spider senses are tingling alot of guys will be selling Canola at $8 this year. don't ask for an explanation cause I dont have one..... My weather prediction is we end up with a fall like last year... that means no frost for a while and big surprise in the size of Canola Crop.. Figuired I may as well pull a predictioon out of my ass just like everyone else..

Anyone Harvesting Canola yet? We have some in a swath that my be ready by the weekend.

[fjlip]

Some swathed Canola east of Saskatoon. Barley swathed near St Gregor. Lots of Barley turning needs less than a week. Mostly green tint fields of Wheat. Too many blooming Canola for September!