(Resource News International) — Canola should remain a good crop option for western Canadian producers in 2010-11, although expectations for range-bound prices will mean producers should remain vigilant in looking for their best pricing opportunities.
While spring seeding is still months away, “amongst the variety of cropping options available to Canadian farmers, canola still looks pretty attractive to growers,” said Mike Jubinville of ProFarmer Canada in Winnipeg.
Recent downtrends in the cereal grains would point to relatively strong potential acres for canola next year.
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“I really can’t see us losing any acres,” Jubinville said, adding that more moderate nitrogen prices this year would also be supportive of planting the “nitrogen-hungry” crop.
From a pricing standpoint, Jubinville said there were opportunities for pricing the 2010-11 crop already, though he didn’t think anyone would have actually done anything yet.
He expected canola was entering a sideways trading range, after two years of moving higher followed by two years of a downward trend.
While he didn’t expect to see a rally in new-crop prices, he thought the trading range could be as wide as $100, which would occasionally present good opportunities.
“It will be a year of vigilance to try and pick away at pricing opportunities within that broad sideways range,” said Jubinville.
Unknowns, such as weather and global production, will do a lot in determining the direction new-crop prices take, but historically speaking, a price in the $9.50 to $10 per bushel level should be profitable, according to the analyst.
If new-crop cash prices can be found at that level, Jubinville thought it would be a good place to do some pricing.
Depending on the location, basis opportunities currently available from some grain companies across Western Canada would work out to new-crop canola prices in the $8.90 to $9.30 per bushel level.
