(Resource News International) — Canola basis levels in Western Canada are widening out due to the large supplies being held in commercial hands.
Mike Jubinville of ProFarmer Canada estimated there were 200,000 to 300,000 tonnes of canola that had been scheduled to go to China, with which exporters are now over-supplied.
There are currently just over a million tonnes of canola in visible positions, which compares to 864,000 tonnes at the same point a year ago, according to Canadian Grain Commission data.
As the grain companies work through those supplies, basis levels should start to tighten up, said Jubinville.
Looking at prices offered by Louis Dreyfus Canada, as an example, spot basis levels range from around $12 per tonne below the futures in southern Alberta, to as wide as $36.50 below the futures in parts of Saskatchewan.
Basis levels across the Prairies tighten in through the winter months, with the best values offered for March delivery.