Click here for the J-MAS Fundamentals Page, where you will find the pdf version of the full report.
Market Notes – Canola trying again to make a counter trend move on a Technical basis, but fundamental Crush is actually holding us back coming in at less than 140K for the 5th straight week – we are averaging 79.5% of capacity vs 89.1% this time last year. This needs to ramp up as shipping Canola Oil is much more efficient than shipping Canola Seed.
Durum has caught a bid for top grade – likely in reaction to the amount of Durum being truck south at much higher bids. Until this catches up with #2 pricing, we continue to recommend a hold into 2015 if need be on the final 20% (or half of whatever production you have left uncontracted).
Lentils continue to grind and we get less and less Bullish as a few different incentives for Lentils to catch some discretionary acres this year as producers look to avoid “bulk” shipped grains and the somewhat misleading allure of the Container.
Report Highlights (see full report for more)
Remember: Fundamentals act best as a Longer Term base upon which Technicals and Market Sentiment enact upon in the Short & Medium Terms.
Canola – The Market is pricing in an 18.9% SUR, J-MAS is pricing in a 17.5% SUR which should correspond to a $9.10 price level – from a purely Fundamental standpoint. The debate on Demand and Final Stocks is hotly contested. The Purely Bullish case gives $10.20 Canola and the Purely Bearish gives $7.68 – that is your range. Looking at $8.55 spot pricing, there is moderate value in holding out for $9.10 but you must be comfortable with your sales position – which we would be above 60% sold.
Durum – The Market is pricing in a 39.6% SUR, J-MAS is pricing in a 34.4% SUR which should correspond to a 5.80 #2AD price level – from a purely Fundamental standpoint. The debate on Demand and Price is hotly contested. The Purely Bullish case gives $6.56 Durum and the Purely Bearish gives $4.75 – that is your range. Looking at $5.02 spot pricing, there is good value in holding out for $5.80 but you must be comfortable with your sales position – which we would be above 70% sold.
Gr. Lentil – The Market is pricing in a 17.0% SUR, J-MAS is pricing in a 18.2% SUR which should correspond to a 21.3 #2 Large Green price level – from a purely Fundamental standpoint. The debate on Stocks and Price is hotly contested. The Purely Bullish case gives 30.3c Lentil and the Purely Bearish gives16.1c – that is your range. Looking at 17.8c spot pricing, there is strong value in holding out for 21.3c but you must be comfortable with your sales position – which we would NOT be below 35% sold – and understand that Fundamentals are not the only thing driving price.