November Canola

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November Canola

Jul 8, 2020 | 09:35 1 Can't decide what it wants, or maybe it has...
5 minute chart

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Jul 8, 2020 | 10:01 2 Looks like a whole bunch of little somebodies want it to go up, and one big somebody wants it to go down. Reply With Quote
Jul 8, 2020 | 10:14 3
Quote Originally Posted by AlbertaFarmer5 View Post
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. Reply With Quote
Jul 8, 2020 | 10:20 4 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. Reply With Quote
Jul 8, 2020 | 23:17 5 But then what about the "specials!!!" 🤪 Reply With Quote
Jul 8, 2020 | 23:33 6 Errol, 101 do you guys think November contract will actually hit $490 this summer? Reply With Quote
Jul 9, 2020 | 07:57 7
Quote Originally Posted by Oliver88 View Post
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. Reply With Quote
Jul 9, 2020 | 09:31 8
Quote Originally Posted by Oliver88 View Post
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 Reply With Quote
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  • Jul 9, 2020 | 09:58 9 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. Reply With Quote
    Jul 10, 2020 | 06:23 10 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?
    Last edited by farmaholic; Jul 10, 2020 at 06:31.
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    Jul 10, 2020 | 07:17 11 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
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    Last edited by farming101; Jul 10, 2020 at 07:21.
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    Jul 10, 2020 | 07:18 12 Next "window" for a downturn is just before the combines roll. Remember 2013 Reply With Quote
    Jul 10, 2020 | 07:30 13
    Quote Originally Posted by macdon02 View Post
    Next "window" for a downturn is just before the combines roll. Remember 2013
    The slaughter continued into Feb 14. $8 cash canola. 50+ basis Reply With Quote
    Jul 10, 2020 | 07:47 14
    Quote Originally Posted by farming101 View Post
    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. Reply With Quote
    Jul 10, 2020 | 07:54 15 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. Reply With Quote
    Jul 10, 2020 | 07:55 16 Thanks 101, I would like to see the futures work a little more for me rather than using the positive basis to achieve the higher price. Reply With Quote
    Jul 10, 2020 | 07:59 17 Macdon02, that is beyond my comprehension. Reply With Quote
    Jul 10, 2020 | 08:04 18
    Quote Originally Posted by macdon02 View Post
    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.
    Ha, by then a new pickup truck will be 200,000

    I don't disagree that $7 beans are possible. I would say 2021 as early as April/May or at least by Nov.
    It is a possibility anyway. Not a sure thing Reply With Quote
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  • Jul 10, 2020 | 08:34 19 In the mean time, canola has decided what to do after the July 8 up-down day.
    Prices are up nicely today and have actually broken through some resistance.

    Update: Friday closed lower. Not unexpected, as it often does, but not positive either.
    Last edited by farming101; Jul 11, 2020 at 09:36.
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    Jul 11, 2020 | 09:20 20
    Quote Originally Posted by farming101 View Post
    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
    Agree, old crop basis now at-risk.

    USDA really didn’t throw any bone out yesterday. With the U.S. crop in such good condition, summer bulls may start to throw-in-the-towel . . . .

    Trump admitting no Phase 2 deal, but what about Phase 1? Reply With Quote
    Jul 17, 2020 | 10:34 21 Looks like 484.30 has some special significance...the mark to beat. Could also be a double top, hope not
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  • Jul 17, 2020 | 21:50 22 Lethbridge still has $0 basis for November. Reply With Quote
    Jul 17, 2020 | 22:08 23
    Quote Originally Posted by vvalk View Post
    Lethbridge still has $0 basis for November.
    23 under here

    November closed a tick or two under the median line. Best close for the nearby since March 31 and a Friday too. Reply With Quote
    Jul 17, 2020 | 22:24 24
    Quote Originally Posted by vvalk View Post
    Lethbridge still has $0 basis for November.
    Richardson's crush plant? Reply With Quote
    Jul 17, 2020 | 22:59 25
    Quote Originally Posted by farmaholic View Post
    Richardson's crush plant?
    Yes. In fact they picked up $11 November targets so actually +$1.70 basis Reply With Quote
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  • Jul 17, 2020 | 23:05 26
    Quote Originally Posted by vvalk View Post
    Yes. In fact they picked up $11 November targets so actually +$1.70 basis
    Are they other locals competitive? Reply With Quote
    Jul 17, 2020 | 23:15 27 Basis on delivered Yorkton Richardson crush is -$25 for fall off Nov

    Delivered locally for fall off Nov ~-$50.....Yee-Yikes

    Maybe some negotiating could improve those #'s. Reply With Quote
    Jul 17, 2020 | 23:15 28
    Quote Originally Posted by farmaholic View Post
    Are they other locals competitive?
    I think so but not sure. I basically only sell to the crusher Reply With Quote
    Jul 17, 2020 | 23:25 29 Just starting here , be patient Reply With Quote
    Jul 17, 2020 | 23:35 30 And I just priced some specialty canola the other day. My basis is locked in and its what really enhances the net price. So it's the futures that has to do the heavy lifting to make my price even better.

    I did get a good price but....

    I priced about 6 bu/ac. That is enough for now because even that is more than I ever did in the past. Usually waited til crop was in the bin. If futures continues to run and the crop looks like a sure thing I might do more. What are the chances of a harvest rally? We saw some canola fields that are losing their luster....finishing up flowering. I assume some southern Alberta canola is fully podded?
    Last edited by farmaholic; Jul 18, 2020 at 00:15.
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