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Discussion Starter #1
So. Anyone want to share how they are playing new crop?
Normally when a guy can lock in $14 I’d be like **** yeah. 80% priced done and deal.
However now seeing canola can go to $18-20 a bushel the punishment could be something never seen before on a major short fall.
Interested in how others are going to play it!
 

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0 like I always do for Canola.........that being said I never grow that stuff.

locked in 2/3 of pea acres for 8.50 delivered. Was happy as a pig in ****. Then they offered 10.20 with act of god....so locked in the last 1/3. This all new crop
If it goes higher then that well good for the guys who held out. My 2 cents is if I can’t make money at 8.50 and 10.20 on peas I should not be growing them.

Granted this all goes to **** if it don’t rain
 
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With our current moisture levels and drought we seem to be locked into. It is very hard the have the confidence to forward price much.
Also, for our production area, there will have to be a major change in the weather for us to come close to an average yield, maybe we are headed towards a smaller crop in the prairies?
 

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Probably can’t go too wrong with 10 [email protected]$14. Just think what happens if there is a wreck. Sue said $30 beans are possible in 2022. Maybe A guy should be a buyer at what new crop prices are. Grain buyers are always tryn to buy cheap as they can.
 

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Use a trading account and set your floor price with a put options. Cost about $30/tonne but then you have your floor locked in and can ride the wave, just remember to sell before the wave crashes on shore.
 

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20% of normal production priced for September off the combine.
I rarely price more than 25% as drought or something else has and can kick a guy in the ass.
 

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In the Red River Valley we still have good moisture on our heavy clay soils and I hate to wish for rain because that is when you get a monsoon. I think if you have high debt the current new crop values will make good profits and I have been pretty aggressive seller. I have been buying plenty of puts on canola and maybe dont feel as bullish as most guys. At 14 bucks new crop locked in and a put attached I feel protected.
Also been actively eyeing Nov 2022 futures with prices sitting at 12 bucks net to you. I have sold some at that and thinking to do more and putting a call option on those bushels.
The commodity boom as of lately may drag up fertilizer next year so that is another concern with high prices. Everyone wants a piece of the pie.

It is interesting noting that Viterra e- blast explained how red spring wheat prices look pretty bleak for this year.

I really dont believe this rally is based on supply and demand. Its more a function of china suddenly filling there 2 and half year spat with the US.
I sometimes worry when the USDA increases there limit up and down values. That means they are even unsure of supply and demand.

This time is not for the faint of heart. Use Options
 

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It is interesting noting that Viterra e- blast explained how red spring wheat prices look pretty bleak for this year.
Perfect, must be the year to grow wheat then.
I like to ask people with no skin in the game who give marketing advice," If you know marketing so well why do you need my money and this job, you should be rich"
It gets quiet
Oat King, wondered where you were getting your options from?
 

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Discussion Starter #10
X2 I’d be interested in who you guys are dealing with on options. I used to hold my old mans account after he passed for years and never used it. Can’t even remember the name other than it was in Winnipeg.

QUOTE="glensts, post: 3419814, member: 2704"]
History chart, can go from $700 -400 pretty quick. Canola Historical Prices - Barchart.com
[/QUOTE]

Isn’t that the damn truth! A week straight of limit down can be pretty sickening. That ride down is a *****!
 

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Use to use Union Securities. Then a whole bunch of paperwork changed for Incorporated farms and pretty much had to give blood to keep the account So I didn't
 

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This time is not for the faint of heart. Use Options
learned that the hard way.
we put some calls on some early sold canola worked out good, but usually just buy and sell futures hate the cost a put and call bring. not that hard to match it with just a 1 cent commision
 

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Like everybody I do not know if the price will be higher or lower on canola or anything else come Fall. Heck, I do not even know with a 50% variance between what I would call a high yield and the lowest yield* of canola I will come up with. However, I do know what it will cost to grow this crop. With that info I will be doing this yr what seems to work every yr and that is price up to my max insurance coverage at what will be over $14/bus. I do not care if the price goes higher or lower.

FWIW - Actually last year using this strategy would have seemed like a complete risk management disaster compared to the $18/b and/or 60-70bpa type stories that you read about on forums like this. Even though my canola returns were my poorest compared to all other crops last year I would take last year total returns every year and have a much shorter farming career.

* hail could make yield even less, but would say my net return in that scenario will be fine as well.
 

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wondered where you were getting your options from?
Yeah so , I buy options from Viterra, Bunge , and Cargill. I havent done it yet but i can also buy them from Kluis commodity using there brokerage services. I subscribe to his market pack and I value his opinion as a market coach sort of like having Daryl Sutter behind the bench of the flames giving you S H I T when you screw up!haha

Timing is everything with these options and the more you wait the more expensive they can get. One important point I like to consider is to buy the closest strike price to the futures price. That way if price falls you dont have to wait as long till you put nets you money. That put tends to cost more but consider the risk and time it takes to make it profitable.
 

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RJ O'Brien offers a trading account that you manage on your own, they also have a calculator to help understand the value of the options whether they be calls or puts so you can understand what value you should be looking to pay especially if you are creating one that doesn't exist yet. It is a process to get in place but commissions are way less than RBC, especially for smaller lots.
 

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You do realize that an at the money option has the most time value associated with it - IE no intrinsic value, all time value? Selling options may be a better strategy to look at.
 
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