Canola cash bids erode with futures

(Resource News International) — Canola bids in Western Canada continue to move lower along with the futures. However, basis levels have shown some improvement as end-users are seen still needing to cover their commitments.

Canola cash prices are currently in the $9 per bushel range across most of Western Canada, ranging from a low of $8.67 in parts of Saskatchewan to a high of $9.51 in parts of Alberta, according to the latest Prairie Ag Hotwire data.

The net cash price has certainly been sliding, but there has been some improvement in basis to keep farmers interested, said Mike Jubinville of ProFarmer Canada in Winnipeg.

There was still some strong demand heading into the fall period, he said, which had end-users moving basis levels to some relatively strong levels for this time of year.

However, while there may be some improvement in the basis, it will not offset the falling futures, Jubinville saod.

While there are problem areas for canola production, the net sentiment in the trade is that the crops are getting better, said Jubinville.

“It doesn’t matter what the canola crop is doing in the field right now, as long as there is the sentiment that the overall oilseed base is growing,” he said.

The strong Canadian dollar was also weighing on cash prices, he said.

Jubinville expected the downward pattern would continue in both the cash bids and the canola futures, barring a serious production issue such as an early frost.

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