Canola market

[sharron]

This past week has seen a significant drop in canola price.How much downside potential still exists?Is there any upside potential/

[sharron]

Is there a bottom in the canola market? Short term the answer is likely sideways with potential for slightly lower. The drop in soyoil prices and a stronger loonie have both taken their toll on WCE canola futures - both old and new crop. Until some new news hits the market, I'm not so sure we wouldn't see lows close to $350/t on the March/May contracts. Provided you have met your cash flow needs, you can likely be patient in any more pricing on this dip. Most springs give us a look at a weather rally and this year should be no different. July 31 canola carryovers are likely to be very tight and this should give the market some spark this summer as well. Be realistic on pricing expectations, however, with runs back to the $385 to $390/t area about all this market can handle in the next 6 months (assuming reasonable weather, a 65 cent loonie and less than 23 cent CBT soyoil). New crop gains should be similar. New crop declines should provide a good warning for 99/00 pricing with return to $370/t plus Nov. canola a long shot.

[sharron]

If you take a look at the grain prices published by the Alberta Grain Commission, you will see "New Crop Canola Basis". (The page is:<br> http://www.agric.gov.ab.ca/economic/stats/grdaily.html <br> The range has recently improved. Might be an indication of some stability now and might be worth checking out basis levels in your area. <p>Also, although they are related, it is very important to clearly separate the fundamentals of "old crop" and "new crop".

[Mufferaw]

&lt;a href=&quot;http://s107.photobucket.com/user/PigsInSpace4/media/RainfallTotalsUS_zps8oktuhrk.jpg.html&quot; target=&quot;_blank&quot;&gt;&lt;img src=&quot;http://i107.photobucket.com/albums/m311/PigsInSpace4/RainfallTotalsUS_zps8oktuhrk.jpg&quot; border=&quot;0&quot; alt=&quot; photo RainfallTotalsUS_zps8oktuhrk.jpg&quot;/&gt;&lt;/a&gt;