(Resource News International) –– Old- and new-crop canola bids in Western Canada continue to deteriorate, with producers less than happy with the situation.
“The deterioration in canola futures at ICE Canada and soybeans at the CBOT have translated into some pretty low cash bids in Western Canada,” said Ken Ball, a broker with Union Securities Ltd.
“There might be the odd location looking to cover needs, and in turn some firmer bids, but for the most part, values have been declining to match the weak futures.”
There has been little in the way of news to agitate the large commercial players in the market, Ball said.
“Normally at this time of year, there are dryness concerns in the soybean growing regions of either Brazil or Argentina,” he said. “This year there just has not been any worries.”
Add in the fact that domestic canola supplies in Canada are sitting at some pretty large levels, and that there don’t seem to be any soybean shortages anywhere, cash bids have no choice but to weaken, Ball said.
“Any attempt to build a bull market in the oilseed sector has been unsuccessful as well,” he said.
Producers would be willing to plant a crop if new-crop bids can hold around the $9 per bushel level, Ball said. However, if values continue to remain below that level, producers will be giving some strong consideration to other crops, especially given that the cost of producing canola remains high.
“The cost of growing canola has come down, but in comparison to other crops, it still remains expensive given the return prospect,” Ball said.
New-crop bids for canola, delivered to the elevator, as per Prairie Ag Hotwire data on Friday, in Saskatchewan ranged from $8.02 to $8.65 a bushel, in Manitoba from $8.41 to $8.65 and in Alberta from $8.65 to $8.66.
In early January, new-crop canola bids in Saskatchewan were $9.05 to $9.26, in Manitoba from $9.17 to $9.30 and in Alberta from $9.26 to $9.30.
Old-crop bids for canola, delivered to the elevator, as per Prairie Ag Hotwire data on Thursday, in Saskatchewan were $7.53 to $8.30 per bushel, in Manitoba $7.66 to $7.93 and in Alberta $7.52 to $8.56.