(Resource News International) — Firm cash canola bids in Western Canada may be hitting their upper limit for the time being, as elevators fill up with freshly harvested supplies and high futures prices cause basis levels to widen.
Tracy Glessing of Northeast Terminal at Wadena, Sask., about 140 km northwest of Yorkton, said basis levels were widening as end-users become covered for the October/November period.
Current cash bids in the $11 to $11.50 per bushel area across the Prairies could stay that way for awhile, he said, but “as guys sell more and contracts come in, we’ll probably see more canola hit the market and the prices will move down to $10.50.”
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Northeast Terminal is situated in the area of Saskatchewan that saw some of the largest problems with excessive moisture this year and Glessing estimated that only 25 per cent of the fields were seeded.
Given the poor local conditions, producers in the area may have hoped to see even higher bids for their small canola crops. However, Glessing pointed out that northeastern Saskatchewan is only one piece of the larger pie and better crops in other areas were making up for any local supply tightness.
“You hit one place that’s poor and the next place makes up for it.”
While canola bids may be hitting their upper limit for the time being, Glessing said oats were a crop in which the poor Saskatchewan production could still lead to more strength, as the province would normally be a major producer of oats.
