$603.30 on the May gives us a spot $13.40 bid into Assiniboia. $556.00 on the November gives us an Aug-Sep 15th $12.09 bid into Assiniboia for New Crop.
We are 17 hours away from the 1st major report of the 2012/13 Marketing campaign with USDA Prospective Planting report out tomorrow at 6:30 pre-market. We are also just 26 days away from our own StatsCan Seeding Intentions of our Principal Field Crops.
The first report though is coming exactly as Canola hits a 3 year high resistance level and – until today – has been looking primed to take it out. This report can be what punches the Bulls through that level into mid-teen territory, or it can feed the Bears and we get a solid double top entrenched firmly in place. It behooves you all to consider your own risk tolerance and opinion on the market and to be positioned in your sales today – ahead of the report – to match that risk tolerance and that market opinion. You have 2 hours.
J-MAS New Crop Canola sales recommendations are ahead of the curve a little at 11 bushels or 40% sold (verse many at 30%) with an $11.81 sales average and 73% of “the Move” captured so far.
It can be seen clearly on a Weekly chart that Canola is very near Long-Term Resistance. Last year, when we ran to this level, our opinion was clear in that we were not yet ready to move into the bubble portion of the 2008 rally as stocks were still ample and last year’s crop still had a chance to be massive. Now though, with tighter stocks and persistent weather risks, the odds are much nearer to 50/50 as we approach that same level again and now have a clearly marked line in the sand at $620 to either break through and signal a test of the all time highs or to fail at and leave us range bound for a few more seasons and at the mercy of the weather.
Click on the chart itself for a larger version with notes on where exactly the resistance levels are and to perhaps see more clearly what you think the risk/reward will be on your opinion.
The J-MAS opinion on risk/reward of this report is clear – Canola will float all boats – and we are maximum Canola sold for this time of year and at a healthy price; but we remain undersold Peas, Durum, Flax and Lentils on the potential for an upward movement further in Canola, or a catchup period once Canola does indeed finds it’s top and we will then add to sales on those crops – and that can easily be right here where we are today. We’ll know more tomorrow.
Canola has done a splendid job of trading on its own Fundamentals with only limited help needed from a Soybean rally. With today’s close off the highs and a big report for Beans tomorrow that may already be priced in on the Bullish side, we will do what we always do on Report day – watch the close.