Table of contents
- 2023 Harvest Sample Program
- Apply for a cash advance under the Advance Payments Program
- Apply now for an Agricultural Society Innovation Award
- Artificial intelligence, the food sector and the consumer
- Cattle on feed reports show tighter supplies
- Cow inventories – Are we still liquidating
- Feed barley prices are moderating
- Feeder cattle prices are strong
- Forage sources
- Improving on-farm irrigation systems
- Lamb market trends
- Perseverance in the pork sector
- Pet ownership and pet food trends
- Rebuilding Alberta’s cattle herd
- Shop rates is a farm input
- The value of straw
- U.S. hog contraction still ahead
- What to do when crop prices are volatile
- CropChoices updated for 2022
- Agri-News – Newsletter archive
- Elm pruning ban starts April 1
- Nominations open for Agriculture Hall of Fame 2022
- 2022 Crop considerations
- AgriProfit$ cow/calf benchmark report
- Register for Open Farm Days 2022
- Cropping Alternatives 2022 now available
- Preventing wildfires is always in season
- Canadian crop movement
- Certified seed costs
- 2021 Agricultural Society Innovation Award recipients
- Ocean shipping rates – what do they mean for Canadian exporters
- Participate in Halal Expo Canada
- Caution when winter burning
- Understanding canola basis
- Nitrogen prices and exports
- Take part in the SIAL Canada trade mission
- Consider the right time for manure or compost application
- High crop prices vs low 2021 crop yields
- The gift of an Alberta Christmas tree
- Great gifts for commercial producers
- Stocking stuffers for livestock producers
- Invitation to dairy farmers
- Apply for an Agricultural Society Innovation Award
- Growing gifts for gardening enthusiasts
- Canadian crop usage
- Cattle prices and above-average sales
- Alberta Open Farm Days a big success
- Better safe than sorry with winter burning
- Natural gas prices
- Consider the right source of manure or compost for field application
- Stored canola is well worth protecting
- Dealing with food loss and waste
- Live cattle imports and cattle slaughter both higher
- COVID-19 and demand for e-commerce
- Sugar beets are important to Alberta’s economy
- The canola market – sell, replace or hold
- Canadian Agricultural Partnership Farm Technology program
- Canadian Agricultural Partnership Water program
- Diagnosing pesky forest pests
- Field selection for fall manure or compost application
- Alberta lamb prices continue to be strong
- Harvest Sample Program
- 2021 Alberta nitrogen prices
- Prevent lead poisoning on pastures
- Be in the know this wildfire season
- A canola pricing option to consider
- Sign up now for the 2022 Dairy Cost Study
- Richardson’s Ground Squirrel control
- FireSmart your spring cleaning – Around your home
- COVID-19 and meat price trends
- Alberta rat control - taking care of business
- Forward pricing wheat
- FireSmart your spring cleaning – Around your property
- Crop Reporting Program
- Alberta approved farmers' markets now open
- Albertans can do their part to prevent wildfires
- Minimal canola carryover
- Hard work pays off for Sherwood Park-based company
- May gardening possibilities based on frost probabilities
- Cattle on feed inventories
- Using the Alberta Climate Information Service Fusarium Risk Tool
- The Canadian dollar and commodity prices
- Okotoks-based company wins gold at SIAL’s Innovation competition
- Dangers of blue-green algae
- Help protect Alberta’s beautiful elm trees
- Weather and weather data at your fingertips
- Fed cattle prices holding strong
- Fireworks and exploding targets can cause wildfires
- Put option basics
- Risk to bighorn sheep and mountain goat populations
- Lamb and sheep market update
- Interactive export catalogue launched
- Global appetite for pork
- COVID-19 and foodservice trends
- Video Ante-Mortem Inspection program
- Crop prices have fallen - back to marketing basics
- 2022 Alberta canola seed costs
- Register for Getting Into Food Service
- Sheep industry fares well despite challenges
- Canadian canola crop prospects
- Register for Vendor 101 training
- Learn about the legalities of the food co-packing industry
- Bunnies and biosecurity – What you can do
- Canola crop options – Sell, replace or store
- Optimism for fall calf prices
- Smaller cow herd seems likely
- Determine the right rate for manure or compost application
- Agricultural Society Innovation Award accepting applications
- Get an assessment of your grain’s quality
- AgriProfits supports the Canadian Cow-Calf Cost of Production Network
- Alberta and U.S. cattle price spreads
- Advance Payments Program
- Change in AOPA Livestock Type Calculator
- Consider short-term in-field manure storage
- Uncertainties in the lamb market
- Keep safe burning practices top of mind
- The Pacific Northwest – A priority export market for Alberta companies
- Learn about exporting to the U.S. Midwest
- Growing opportunities for health products in the Mexican market
- Canadian crop deliveries and exports
- AgriProfits – Dairy Cost Study program
- Accessing free market intelligence
- Alberta hay prices
- Improve returns from culled cows
- Understanding the basis for crops
- 2022 Cattle market review
- Getting more Alberta products on the shelf
- Communication - A key to any successful business
- Register for the Farm to Market to Table Conference
- Check those bins
- Winter manure management considerations
- Recognizing innovative agricultural societies
- Cattle by the numbers
- Canola price seasonality
- Jack Lewis inducted into the Agriculture Hall of Fame
- Tracking environmentally sustainable agriculture in Alberta
- Bruce Beattie inducted into Agriculture Hall of Fame
- COVID-19 and healthy food trends
- Simone Demers-Collins inducted into Agriculture Hall of Fame
- 2022 Alberta lamb and sheep market update
- Assess manure storage and wintering site locations
- Register for Open Farm Days 2023
- Cropping Alternatives 2023 now available
- La Nina boosts Australian crop production
- Hog market update
- COVID-19 and vitamins and supplements
- Guidelines add clarity when investigating sites for manure facilities
- Strong Canadian crop movement to date
- Keep your Premises Identification account up to date
- CropChoice$ updated for 2023
- U.S. Choice-Select boxed beef price spread
- Trends that will shape the grocery industry in 2023
- How to use CropChoice$
- Retail and foodservice sales slowly returning to pre-pandemic normal
- Why bighorn sheep and domestic sheep or goats should not mix
- 2023 Crop Reporting program
- Canadian canola market
- 2023 Alberta approved farmers' markets now open
- Dangers of blue-green algae when temperatures rise
- Can Canada see beef herd expansion in 2023?
- Canola usage remains strong
- Lamb and sheep market remains resilient
- Benefits of installing shallow buried pasture water pipelines
- Oat price outlook improves
See event listings and more articles in this edition of Agri-News: April 11, 2022 issue
“Canola prices have risen dramatically during the last year to all-time highs, with new crop November 2022 canola futures currently trading near $960/tonne,” says Neil Blue, provincial crops market analyst with the Alberta government. “Continuing strong demand for oilseeds across the world, together with the drought-reduced canola crop in Canada and the northern U.S. have pushed prices up.”
Fall-delivered canola contract prices are in the $930 to $960/tonne range, depending on basis levels. Blue points out those are potentially profitable prices, even with the high fertilizer and fuel costs. Weather dependent, there is potential for a resurgence in canola and other oilseed production, and lower prices, this year.
“To the extent that one is confident in their 2022 canola production and seed quality, contracting 10-15% of expected production seems like a good idea. For producers reluctant to forward contract before harvest, with last year’s drought in vivid memory, a put option is worth considering.”
Figure 1: November 2022 Canola Futures

Options are a subset of the futures market and are specific to a certain commodity and futures month for that commodity. For those producers willing to open a futures account, an option may offer hedging advantages. Some grain companies offer a similar product to a put option, but with a delivery commitment attached to their contract.
Purchasing a put option gives the buyer of that option the right, but not obligation, to enter into a “sell” futures position at a predefined price (called the strike price) anytime before that option’s expiry date, and regardless of what the futures price does.
“In other words, you buy the right to lock in a certain futures price, but do not need to lock in that price,” explains Blue. “It is this right that gives the option a value. Buying a put option locks in a minimum futures price for a cost (the premium). There are no margin calls when you buy an option. The only risk is possible loss of the option premium plus some commission.”
Buying a put option through a commodity futures broker does not commit one to a basis or a physical delivery contract. This means that the ability to shop around among buyers for the best basis level remains open and there will be no buyout penalties in case of a crop volume or quality shortfall.
“Because of the historically high futures prices with high price volatility, options are now relatively expensive. However, a consideration is to assess the cost of options at the various futures price levels (strike prices) and perhaps choose a lower level of price than the current futures price. That option will still protect a historically high price and, if the futures price is above that level near expiry, then the price insurance has still done the job of price protection.”
For example, with the November futures price near $960/tonne, the cost for an $830 strike price put option is $22/tonne. Considering that $830 strike price and $22/tonne premium, even if all the premium eroded away by October option expiry, a futures price of $808/tonne ($18.32/bushel) would still be protected. Between now and October, that option could be sold back to the market for remaining premium, be that higher or lower than the cost, if the price protection was no longer wanted.
“In summary, a put option is attractive to producers who are concerned with the alternative of signing a deferred delivery contract, have already forward contracted with physical buyers to their comfort level, or wish to retain their ability to take advantage of possible higher prices while protecting price downside,” says Blue.
For more information, see:
Contact
For more information, connect with Neil Blue at 780-422-4053.
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