(Resource News International) –– Old-crop canola bids in Western Canada have bounced both upward and downward over the last couple of weeks while new-crop bids continue to remain firm enough to entice a strong acreage base.
“There have been premiums offered for canola by grain companies for spot delivery, but as quick as those premiums appear, they also disappear,” said Ken Ball, a broker with Union Securities Ltd. in Winnipeg.
“They are trying to quickly fill a commitment of sorts, and once that order has been covered, the premiums are removed.”
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A number of producers have been willing sellers once values get into the $8.50 per bushel range, even though they would like to see a value closer to $9/bu., he said.
“At $9 a bushel a lot of producers would be aggressively selling old-crop canola supplies.”
Producers hopeful for better prices have been reluctant to lock in new-crop bids on canola.
“They acknowledge that the canola acreage base in Canada will be extremely large, but they also see the demand factor has also increased significantly,” Ball said, explaining the price optimism.
There is also the possibility of weather-related growth problems still impacting the production aspect, which is also keeping the optimism in the price outlook.
“The production problems may not necessarily be in Western Canada, but in other canola- or soybean-growing regions of the world,” Ball said.
Bill Craddock, a southern Manitoba producer and commodity trader, agreed values could be better but in comparison to the alternatives, prices weren’t as bad as they could be.
“With canola bids at $8.50/bu., and if a producer can at least harvest a 40-bushel an acre canola crop, the producer can still make some money,” he said.
“Quick”
It would take a harvest of at least 80 bu./ac. in order for wheat to even come close to making the same kind of money. “And the problem with that is the money for the wheat will not be available as quick as it will for canola,” he said.
Old-crop canola bids delivered to the elevator in Saskatchewan, as based on Prairie Ag Hotwire data, currently range from $8.13 to $8.66 a bushel, in Manitoba $8.15-$8.66 and in Alberta $8.43-$8.89.
New-crop bids for canola currently range from $8.01 to $8.54 a bushel in Saskatchewan, $8.27-$8.58 in Manitoba and $8.50-$8.58 in Alberta.
Old-crop canola bids, delivered to the elevator in Saskatchewan, in late March ranged from $7.84 to $8.44 a bushel, in Manitoba $8.06-$8.50 and in Alberta $8.26-$8.81.
New-crop bids for canola at that time ranged from $7.92 to $8.44 a bushel in Saskatchewan, $8.29-$8.47 in Manitoba and $8.38-$8.47 in Alberta.
