Cash bids for canola in Western Canada have been slowly firming, although the need to fill contracts at specific locations have seen some upward fluctuations in prices.
“There are certainly waves of demand that have begun to come from both the domestic and export sectors, which in turn has provided for some improved basis levels from these outlets,” said Ron Frost, an analyst with the Frost Forecasting Corp. of Calgary, Alberta.
Producer reluctance to deliver canola has also helped in some regions. “Producers are still busy trying to dry and move the wet canola they have on hand to these outlets, but in these instances, the outlets have actually widened their basis in hopes of deferring delivery,” Frost said.
The other producers who have good-quality canola safely tucked away in the bins have locked the doors and have thrown out the key waiting for much better opportunities, he said. “And those chances are likely to come, but it will depend on how long the producer will be willing to sit on those canola stockpiles,” Frost said.
He said as more and more domestic processors come on line the battle between the export and domestic sector is going to heat up and create good pricing opportunities for producers with canola.
Cash bids for canola, delivered to the elevator, as per Prairie Ag Hotwire data, in Saskatchewan currently range from C$8.28 to C$8.79 a bushel, in Manitoba from $8.74 to $9.28 and in Alberta from $8.35 to $9.04. On November 16, cash bids for canola in Saskatchewan, as per Prairie Ag Hotwire data, ranged from C$7.87 to C$8.52 a bushel, in Manitoba from $8.43 to $8.52 and in Alberta from $7.77 to $9.31.