Archives
All posts for the month February, 2012
Canola: Mar8($12.84) Jul3($12.97) Sep31($11.53)
#2Pea: Mar $8.14 Aug $7.37
#1Flax: Oct $12.42
#2GrL: Feb 23.0c
FdWht: Aug $5.00
#2AD: Sep $6.78
#2HRS: Sep $6.82
$564.20 on the March gives us a spot $12.66 bid into Assiniboia. $532.50 on the November gives us a Sep $11.39 bid into Assiniboia for New Crop.
$$CanolaMPU – Take $12.65 Mar Delivery {564-6Bas} on 15% to be 100% sold (33bu on 33bu crop). Benchmark now 100% sold. At Current Mar $12.65, be 100% sold.
It is a very Bullish signal when Basis narrows while Futures are rising but I still believe in wrapping sales here as a strong move for you to make if you believe in Scale up Selling. The Medium-term downtrend is providing resistance here that I don’t feel we quite have the Fundamentals to break out of yet – as that would signal a move into the teens that seem premature to me right now, plus we are still within range of 61.8% Fib Retracement.
If you believe you have the discipline to ride this up further and sell on a break of the uptrend (possibly 30-50c below the high) that is a good strategy – though I don’t believe many will sell at a price 50c below the high even if that high is 70c above today’s close – and are more likely to ride the downside of this market.
This is the defining principal for Scale up Selling as it takes incredible discipline to utilize a Momentum trading strategy that is typically reserved for Spec Traders who know how to define their risk and are not as emotionally attached to the commodity as a producer is.
$532.5 on the November gives us a Sep $11.39 bid into Assiniboia for New Crop.
$$CanolaMPU – Take $11.39 Sep Delivery on 5% to Standardize at 30% sold (8bu on a 28bu crop) as I know that most operations did not take my $12.15 on 15% recommendation last fall. Benchmark is now 30% sold. At current $11.39 be 25+% sold.
Upside does remain and our own local weather must remain in the mix but too many operations are undersold the New Crop market. Risk of a general precipitation event or an overdue correcting move in the Outsides is too great right now.
Beans have clawed back to a comfortable level in the US Acre Battle an should not need to appreciate too much more without a move higher in Corn, which is struggling right now.
Canola Fundamentals in a vacuum lend themselves towards a $14 handle for New Crop, but Canola does not trade in a vacuum and neither should you.
Canola: Mar11($12.41) Apr12($12.39) Jul8($12.54) Aug22($11.52) Sep30($11.34)
#2Pea: Mar $7.92 May $8.05 Aug $6.55
Flax: Mar $12.76 Oct $12.41
#2GrL: Feb 22.5c Aug-Sep 23.0c
FdWht: Aug $5.00
#2AD: Sep $6.81 Dec $6.97
#2HRS: Sep $6.71 Dec $6.74
$549.20 on the March gives us a spot $12.13 bid into Assiniboia. $525.00 on the November gives us an Oct $11.29 bid into Assiniboia for New Crop.
$$CanolaMPU – Take $12.13 Feb Delivery {549-14Bas} on 10% to be 85% sold (28bu on 33bu crop) – should be around half of your remaining unsold bushels. Benchmark is now 85% sold.
I believe 560 Futures and thus another 25c are available but Basis is sure to begin widening and may steal up to 50% of that Futures improvement.
Charts still look good but with a 3 day weekend in the US and a rapid move already, we are due for profit taking. I simply just believe that a small correction will steal too many calendar days for producers to sell properly if the rally does resume after a potentially weeks long break. We are about to become March, and March quickly becomes Seeding, which quickly becomes June.
I am holding 15% now but may sell that on any quick pop, so there is little reason not to go right to 100% for anyone who likes the look of a price well into the $12’s.
Canola closed up $6.50/mt today right near the high.
I knew that breaking through 538 was a key level and should give us 550-560 but I would much rather be seeing a measured move higher than the Parabolic one we are seeing now. Canola is leading the Grain market and that is typically not a good sign.
A close on the high is Bullish but we are moving into Overbought territory though some wiggle room there as well for a higher open again tomorrow.
I am quite possibly an Intra-day seller tomorrow but will not blame anyone from pulling the pin on 10% Old or New Crop right here this afternoon.
Canola: Feb13($11.99) Jul10($12.23) Oct27($11.32)
#2Pea: Feb $8.05 Aug 6.70
#2GrL: Feb 23.0c
FdWht: Aug $5.00
#2AD: Sep $6.57
#2HRS: Sep $6.67