Prices for canola on the cash market in Western Canada are strong, finding good support from the late spring in the region.
The uncertainty surrounding the late spring in Western Canada is supportive for both old-crop and new-crop values, said Errol Anderson, president of ProMarket Communications in Calgary.
“I think the old-crop canola might be starting to go down, but there are such abnormal conditions right now that it’s maintaining really solid support under the market,” he said.
Old-crop canola values ranged from $14.18 to $15.00 on Monday, while new-crop prices came in at $11.89 to $12.48, according to Prairie Ag Hotwire.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Some Prairie regions are facing flooding problems, and some areas still have snow on the ground. An unseasonal snowstorm hit some western Canadian growing regions in late April, causing further planting delays.
The late spring has also caused farmers to be slow sellers, which is keeping a firm floor under the market. Producers want to wait until they’re sure they can get a solid crop in the ground before emptying their bins.
Some producers are also holding out for better prices, Anderson said, noting that what’s left to be marketed is in the hands of farmers that “don’t have cash flow concerns to speak of.”
“There’s talk that growers want $15.50 or $16 per bushel” on old-crop, said Anderson. “I’m not sure the market will give that to them, but, you know, markets are markets.”
Anderson said the next flurry of deliveries may not be until June, unless farmers decide to do some selling within the next two weeks while they’re still unable to do fieldwork.
But they could run into problems if they wait too long because there is an inverse in the market going into the new crop.
“If you store into new-crop, you’ll be storing into a $2 per bushel discount,” he said.
Prices may also move lower once fieldwork begins; the market will be dependent on whatever the demand situation is like at the time.
Right now, demand is still good for Canadian canola, but there are signs that export demand is starting to slow down. There have also been rumours that domestic crushers are going into shutdown mode earlier than normal this year, Anderson said.
“If the shutdowns happen in June, then suddenly the old crop is at risk of a price decline at that time of the year,” he said.
— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
