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New-crop canola bids continue to drop

(Resource News International) — Old- and new-crop canola bids in Western Canada continue to deteriorate, with producers not exactly pleased with the situation.

“Cash bids in general for old and new crop have been less than appealing to producers and could still play a role in exactly how much of the crop goes into the ground this spring,” Keith Ferley of RBC Dominion Securities Ltd. said.

There are times when domestic processors push bids up in order to get producers to unlock their bins and deliver some product up their driveways, he said. However, those occasions are few and far between and can vary widely across the Prairies.

“Producers have been willing sellers on the rallies, but when values trend down, the selling dries up pretty quick,” Ferley said.

There had been a pickup in movement ahead of the implementation of spring road bans in some parts of Western Canada, but that movement has now begun to slow, he said.

Canola futures have trended downwards because of the price weakness experienced by CBOT soybean and soyoil values, he noted, adding that the bearish price situation was also fuelled by the record large soybean supplies available in Brazil and Argentina.

As for new-crop bids, Ferley described canola values as unattractive for producers. Bill Craddock, a south-central Manitoba producer and commodity trader, agreed values could be better but in comparison to the alternatives, prices weren’t as bad as they could be.

Producers were likely to give the crop a chance, even if new-crop bids were unattractive, in hopes of some sort of crop disaster somewhere which would result in an unexpected jump in value, Craddock said.

Old-crop canola bids delivered to the elevator in Saskatchewan, as based on Prairie Ag Hotwire data, currently range from $7.84 to $8.44 a bushel, in Manitoba from $8.06 to $8.50 and in Alberta from $8.26 to $8.81.

New-crop bids for canola currently range from $7.92 to $8.44 a bushel in Saskatchewan, $8.29 to $8.47 in Manitoba and $8.38 to $8.47 in Alberta.

Old-crop canola bids delivered to the elevator in Saskatchewan on March 1 ranged from C$7.84 to $8.52 a bushel, in Manitoba from $8.06 to $8.20 and in Alberta from $8.33 to $8.81. 

New-crop bids for canola on March 1 in Saskatchewan ranged from $8.28 to $8.61 a bushel, in Manitoba from $8.51 to $8.75 and in Alberta from $8.68 to $8.77.

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