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The Following are suggestions to help you with the marketing of your canola.
JANUARY
NEW Crop
- Calculate Cost of Production.
OLD Crop
- Determine balance of inventory on hand not yet sold or priced.
- Check basis at country elevators and spreads in March to May futures contracts; prepare to sell some old crop.
FEBRUARY
NEW Crop
- Calculate break-even price needed to cover operating costs
- Calculate additional returns needed to cover other commitments.
- Do price analysis to determine the top 30% of price range in market.
- Seek out market information sources for all oilseeds.
OLD Crop
- Follow May futures and consider selling a portion of stored canola over next two months.
MARCH
NEW Crop
- Inquire about basis and deferred deliver contracts for new crop canola.
- Develop new crop canola marketing plan.
- Consider pricing a portion of new crop; set your target prices.
OLD Crop
- Follow the May and July futures markets looking for old crop price indicators.
APRIL
NEW Crop
- Check basis every week – historically lowest April through August.
- Update cost of production for new crop canola.
- Consider market trends to finalize new crop production plan.
OLD Crop
- Pricing opportunities may appear for old crop.
- Check futures and basis levels often.
MAY
NEW Crop
- Follow November futures market for price indicators; set hedging targets for desired profits.
- Check upcoming basis and deferred delivery contracts for new crop canola.
OLD Crop
- Continue to check futures and basis levels over next two months.
- Should have about 80% of crop sold.
- Play with the balance.
JUNE
NEW Crop
- Examine spreads in futures market prices between upcoming trading months; avoid hedging 100% of crop against cash contracts.
- Check November bills and sell enough to cover those bills.
OLD Crop
- Compare September (old crop) and November (new crop) contracts. Look for a premium for early delivery.
- Calculate storage costs on any old crop canola.
- Study futures and options trades.
JULY
NEW Crop
- Begin to assess canola crop yield potential.
- Monitor new crop contracts for pricing opportunity.
- Talk to a broker to discuss and follow options trading.
OLD Crop
- Consider pricing balance of old crop canola now; if new crop prices are at discount to old crop prices.
AUGUST
- Check inter-month futures contract spreads; assess demand old crop vs. new crop.
- Follow trend lines and consider hedging a portion new crop at prices near top of trend line.
- Watch weather and crop progress reports. Frost scares could mean price rallies.
- Ensure yield potential can support new-crop sales commitments made to date.
- Check options, premium cost and canola price protection.
SEPTEMBER
- Check all area cash markets for best canola basis available.
- Determine early the grade and quality of canola harvested.
- Avoid pricing during periods of heaviest delivery.
- Look for premium basis pricing opportunities in your area.
OCTOBER
- Make marketing decisions for managing taxable income.
- Discuss storage tickets with grain companies.
- Observe all inter-month futures price spreads to assess upcoming canola demand.
- Examine basis; look at pricing January or March if prices are strong.
- Keep in mind, markets decline because loans are due.
NOVEMBER
- In the bin: observe November futures and compare to current cash prices quoted
- What is the basis doing? Is cash price moving further from futures price? Is cash moving closer to futures?
- Check options; premium cost for in-the-money and out-of-the-money price protection.
- Learn about options as insurance against volatile or changing prices.
- To be planted next spring: begin checking pricing alternatives now.
DECEMBER
- Assess effectiveness of previous calendar year’s marketing strategies.
- Calculate average canola price received in previous calendar year.
- Determine whether selling prices were in the top 1/3 of the canola market price range.
- Take year-end inventory of canola on farm.
- Look at pricing 10-20% of new crop.
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