(Resource News International) — Cash bids for canola in Western Canada have been holding fairly steady, although there were a few locations in which the need to fill contracts has firmed up prices.
The reluctance of producers to deliver canola into the cash pipeline has helped to firm up bids in select regions of the Prairies, said Bill Craddock, a south-central Manitoba producer and private commodities trader.
There were also a few companies who have been trying to secure enough supply in order to fulfil commitments. Bids for canola were raised in those locations, but once those needs have been covered, values are likely to move back down again.
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Some grain companies were offering a bit more for the canola, as long as the producer was willing to make seed purchases for the spring from the firm, Craddock noted.
Strength in canola futures on the ICE Futures Canada trading platform have also helped to keep cash bids firm as of late, he said.
The upside in the cash market, however, was being tempered in part by the continued uncertainty regarding Canada’s ability to move canola to China.
The U.S. Food and Drug Administration’s (FDA) crackdown on salmonella entering the U.S. from Canadian canola meal shipments has also reduced domestic crusher demand for canola and in turn reduced competition for the commodity in Western Canada, Craddock said.
The potential for a rail labour disruption at Canadian National (CN) also was viewed as potentially bearish for cash bids, given that canola supplies in the transportation system could back up significantly very quickly.
Cash bids for canola, delivered to the elevator, as per Prairie Ag Hotwire data, in Saskatchewan currently range from $8.14 to $8.91 a bushel, in Manitoba from $8.40 to $8.95 and in Alberta from $8.26 to $9.12.
On Nov. 16, cash bids for canola in Saskatchewan, as per Prairie Ag Hotwire data, ranged from $7.87 to $8.52 a bushel, in Manitoba from $8.43 to $8.52 and in Alberta from $7.77 to $9.31.
