(Resource News International) — Cash bids for canola in Western Canada have now climbed above $10 a bushel in most locations as companies continue to try to pry some canola out of the hands of producers to meet Chinese export commitments and local crusher demand.
“Steady export and domestic processor demand has helped canola bids climb over that $10 per bushel level right across the Canadian Prairies,” said Gord Mitchell, the manager of Mitchell Grain Co. in the Spruce Grove-Stony Plain area of central Alberta.
In some places, he indicated, $10.50 a bushel is being offered for canola.
“Certainly producers are concentrating on spring fieldwork as well as planting operations,” Mitchell said, noting that marketing wasn’t the key issue on the minds of producers at the moment.
However, should the cash price being offered by the industry for canola climb high enough, that could change.
Mitchell suggested farmers were probably looking at the $11/bu. level before they would be ready to sell some more canola into the cash market.
“I think producers in Western Canada have sold all the canola they planned on selling when the price hit the $10/bu. level,” said Ken Ball, a broker with Union Securities Ltd. in Winnipeg.
However, as to what price level producers will be willing to sell additional quantities of canola, it may be more a matter of when, Ball said.
“I don’t think producers are going to sell any more canola until after the crop has been seeded and they are sure that the crop is off to a good start,” Ball said. “Any kind of weather uncertainty will see them become even tighter holders of canola.”
However, Ball said, should the weather be favourable from both a moisture and temperature standpoint, and the crop is looking good, producers will become aggressive sellers as they try to make room in their bins for new-crop supplies.
Canola bids back in the middle of April, according to Prairie Ag Hotwire data, had old-crop canola bids delivered to the elevator in Saskatchewan sitting at $9.11 to $9.78 a bushel, in Manitoba at $9.20 to $9.67 and in Alberta from $9.52 to $9.96.
New-crop canola bids at that time were $8.74 to $9.47 in Saskatchewan, $9.32 to $9.51 in Manitoba and $9.16 to $9.50 in Alberta.