Bunge’s crushing plant in southern Manitoba is drawing in canola from as far away as Saskatchewan, as short supplies in the region lead crushers in both Manitoba and North Dakota to keep offering solid cash prices.
"We are in a very competitive environment right now," said James Loewen, general manager of the plant at Altona, Man. "We may be the best price in Manitoba, but we’re definitely not the best price in our draw area."
Plants in North Dakota were offering even higher prices, he noted, adding that yields were generally disappointing across much of the catchment area, and farmers were holding off on making sales.
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With the futures market under pressure recently, "the basis has had to do much of the work to attract new business," said Loewen.
Canola is offering some of the best crush margins for processors right now, so any swing plants out there are also looking at buying canola over soybeans or other options which adds to the competitiveness in the market, he said.
Reluctant
The Bunge canola crusher at Altona is currently offering basis opportunities of $1 above the January futures for November delivery and $10 above for December delivery, which works out to a price of $12.02-$12.24 per bushel.
Prices would likely need to reach $13 for many producers to increase their sales, at least in the current marketplace, Loewen said.
Despite the reluctant farmer selling, the plant continues to operate at a good pace, with the strong basis drawing in supplies from as far away as Saskatchewan.
Previously contracted Nexera canola also accounts for a large portion of the crush in Altona, said Loewen.
Looking ahead, he also pointed out that while canola supplies were tight in southern Manitoba and North Dakota, there is still a record crop in Western Canada which will eventually find its way to where it’s needed.
