Cash bids for old-crop canola in Western Canada have begun to ease and more declines may be in store, depending on what the March 28 USDA reports have to say.
Mike Jubinville, an analyst with ProFarmer Canada said he expects future cash canola bid direction to come from the USDA’s stocks report, which may show more U.S. soybean supplies than expected. If that is indeed the case, soybean futures may fall – taking canola with them. The USDA will also release its spring planting intentions report on March 28, which could further weigh on soybeans.
Thanks to strong export and domestic crush demand, old-crop canola cash bids had reached as high as $17 to $20/bu in some parts of the Prairies. However, values have started to decline more recently, as end users look ahead to the 2013 canola crop and the likelihood of bigger – and cheaper – supplies.
Old-crop canola prices in Saskatchewan (delivered) currently range from about $13.95 to $14.50, $14.10 to $14.35 in Manitoba and $13.90 to $14.50 in Alberta.
“The easing in bids has more to do with domestic processors and exporters now looking at the new-crop situation and the increased canola production prospects," Jubinville said.
However, any drop in cash canola bids will also likely be limited by the tight old-crop canola ending stocks picture. Ending stocks for 2012-13 are projected by Agriculture Canada at a snug 350,000 tonnes, less than half the 2011-12 carryout.
Mike Jubinville, an analyst with ProFarmer Canada said he expects future cash canola bid direction to come from the USDA’s stocks report, which may show more U.S. soybean supplies than expected. If that is indeed the case, soybean futures may fall – taking canola with them. The USDA will also release its spring planting intentions report on March 28, which could further weigh on soybeans.
Thanks to strong export and domestic crush demand, old-crop canola cash bids had reached as high as $17 to $20/bu in some parts of the Prairies. However, values have started to decline more recently, as end users look ahead to the 2013 canola crop and the likelihood of bigger – and cheaper – supplies.
Old-crop canola prices in Saskatchewan (delivered) currently range from about $13.95 to $14.50, $14.10 to $14.35 in Manitoba and $13.90 to $14.50 in Alberta.
“The easing in bids has more to do with domestic processors and exporters now looking at the new-crop situation and the increased canola production prospects," Jubinville said.
However, any drop in cash canola bids will also likely be limited by the tight old-crop canola ending stocks picture. Ending stocks for 2012-13 are projected by Agriculture Canada at a snug 350,000 tonnes, less than half the 2011-12 carryout.
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