$$LentilMPU – Take 22-23c #2 or 25-27 #1 on 20% to be 100% sold (27bu of 27bu). Benchmark 80% sold. At Current 22.5c be 100+% sold. Best pin hopes on NewCrop.
There are just too many unsold operations out there that any rally will be met with big sales and more likely, it’s that “no rally” will be met with big sales.
Had I been been subscribing to the Kostal reports back at harvest I would have had at least had one like-minded opinion and the conviction to sell 100% off the combine near 30c for #2’s rather than just the 80% we did.
Many brokers and analysts did a major disservice to Lentil producers last fall as you could nott find 3 people in the industry Bearish what at the time was an obviously Bearish market. Losses are in the 100’s of dollars per acre on those “Hold” recommendations unless some type of general market rally is able to scare up a 25-27c #2 Large Green bid in the next 6 weeks.
We now wait for price action to tell the tale. Mildly Bearish, but trade already discounting the S.American numbers as typical slow reaction to weather. Outisides will dominate more than this report will. I remain wary that rains in Argentian will now be the focus.
$534 on the March gives us a spot $11.81 bid into Assiniboia. I’m a small Seller today.
In front of a decently important USDA report tomorrow morning it would be remiss of me not to take the $11.81 that’s in front of us and roll the dice on a good report for just another 10 cents. I therefore will be moving sales up by another 10% today on the spot month contract – moving to 75% sold Canola.
I believe the report will be mildly Bullish and the Charts are certainly in our favour, however risk is present on four fronts: 1) Expectations are for a Bullish report and so limited upside without a strongly Bullish report. 2) Big rains in Argentina are being ignored and could become a focus once report is out of the way. 3) The Outsides are getting overbought and Greece is playing politics – and have a few years of experience on that front. 4) Technically we’ve broken a pennant to the upside, but have not confirmed a takeout of the January highs so any drop here will install a pretty solid double top at an already strong Resistance plane.
Targets out imminently – this note is background on the forthcoming Canola recommendation. All things being equal, if it was not a report day tomorrow, I would not be selling today – hence 10% instead of 15%.