(Resource News International) — Recent strength in the canola futures market has also translated into firm cash bids as harvest delays and the slowdown of farmer selling has resulted in favourable basis levels being offered across Western Canada.
The best cash prices are usually found in Alberta, given the province’s proximity to the West Coast export market. Current prices quoted by the Alberta Canola Producers Commission show that basis levels a couple dollars per tonne above the futures can still be found in some locations.
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Cash bids are nearing the $9 per bushel area once again, added Mike Jubinville of ProFarmer Canada. Cash bids have been rising in line with the futures, which have improved by $20 per tonne over the past week, he said.
“We do have a fairly large book on for export,” said Jubinville, adding that “I still think there is a fair amount of canola that needs to move to export over a short period of time.”
With the last of the western Canadian harvest stalled for the time being, due to wet conditions, “it’s creating reasonable basis opportunities in a rising futures market,” said Jubinville.
He wasn’t sure how long cash bids would be able to stay firm, noting that the strength will depend on how long the harvest is stalled, as well as movements in outside markets.
If equities and crude oil continue to rise, that will draw money into commodities, which will support canola prices, said Jubinville.
However, looking at the fundamentals for oilseeds, he didn’t think there was much room to the upside for canola. He thought the oilseed market was building towards a slight oversupply scenario, and didn’t expect to see much more fundamental strength unless problems develop with South America’s soybean crop.
