November Canola

[farming101]

Can't decide what it wants, or maybe it has...
5 minute chart

[AlbertaFarmer5]

Looks like a whole bunch of little somebodies want it to go up, and one big somebody wants it to go down.

[errolanderson]

Looks like a whole bunch of little somebodies want it to go up, and one big somebody wants it to go down.

Classic commodity market . . . steps up, elevator ride down.

Many small uncapitalized bulls can get wiped out quickly by big bears sniffing out overheated markets . . . . A key reason why bears (sellers) are generally more successful at trading commodity markets.

[errolanderson]

Hedgers note . . . January $480/MT put options traded for $9/MT today. January $480 put strike price - put premium $9/MT = $471/MT ($10.68/bu) - fall delivered basis = net return. This position can be held until Xmas with no production or delivery obligation.

Note: A Jan $490 put may trade for $14/MT which would increase your floor price about 10 cents/bu. Advantage of Jan over Nov put is . . . the grower can work the post harvest basis more effectively (IMO). You have more time.

[Daylate]

But then what about the "specials!!!" 🤪

[Oliver88]

Errol, 101 do you guys think November contract will actually hit $490 this summer?

[errolanderson]

Errol, 101 do you guys think November contract will actually hit $490 this summer?

My two-bits worth . . . Nov canola has heavy resistance @ $488/MT with major support seen around $468/MT. Tomorrow is USDA . . . if USDA throws the market a bone and we rally . . . hit it. Rallies won't hold (IMO).

The Phase One trade deal is what was accidental announced by the U.S. trade rep in late June . . . dead.

[farming101]

Errol, 101 do you guys think November contract will actually hit $490 this summer?

Timing is not good. 50/50 or smaller chance for an intraday @490.

Farm deliveries were just under half a million tonnes for the week ended June 28. Haven't run out yet. If speculation pushes the futures higher I would watch for basis to deteriorate

[farmaholic]

My contract is based on July 2021. With a very good premium(positive basis) and of course no negative basis.

Up until we got the 1.1 inch rain I was nervous about locking in a price on any production, because then Im committed. The basis is carrykng an AOG clause. More confident now. I should probably do some but am afraid to leave a nickel on the table.....lol.

[farmaholic]

Is everything priced in or is there some bullish news to push prices a bit higher short term? Although I have lots of time on my contract.

Alot can happen before the expiry of RSN21 in June 2021.

RSN21 is closed above $500 last trading session, $20 carry off RSX20.

January 2013 canola touched $600. I'm there with my premium but wouldn't it be nice if the futures rallied some more.

How is July $500 canola traditionally rated?

Is there a chart for that 101?

[farming101]

Here is a 15 year monthly July continuation chart

Note: the chart is set to roll at the beginning of the last week in June

[macdon02]

Next "window" for a downturn is just before the combines roll. Remember 2013

[farming101]

Next "window" for a downturn is just before the combines roll. Remember 2013

The slaughter continued into Feb 14. $8 cash canola. 50+ basis

[macdon02]

The slaughter continued into Feb 14. $8 cash canola. 50+ basis

Fwiw and just my thought process, last ratchet up, 2007-2008 was an 18 month phase transition, it got sold the entire way up only to make new highs, a doubling. 12 years ago is too fresh in our minds. We can not argue the massive coiling going on. The only path i see possible is a complete washout ala '13-'14 leading us to believe the world is gonna end which will provide the fuel for the next ratchet up. I could be wrong but there's some target deep under current market levels that need filling. I think beans go sub $7. Wait and see.

[macdon02]

If we see 676 soy my mentality will shift from sell every rally to weld the bin doors using options to reown multi year inventory. Upside target being $33. That's when i call Ritchie Bros.