Keep Close Eye on Canola Market

[melvill]

Oct 31 - since the close on Friday, Oct 26, WCE Jan canola futures have gained close to $16/tonne. If you're a canola grower who needs to move seed for cash flow, keep a very close eye on this market. Advertised basis levels haven't been great, in fact they could be described as horrible, because most buyers are "cash long". But, if you need some cash, a little negotiation may be able to get you a lower basis. If not, try for a "To arrive" or "Deferred Basis" price or a "Rally Master" type of pricing.

[rain]

There is still some good basis levels out there. I have some $3.50 Under the Janaury for November delivery into the Calgary region.

[crusher]

To Rain,

That's an impressive basis. Around Edmonton it reflects more of what Lee is saying. What would be a "normal or good" basis level for your area? I believe 10 under and better is pretty good for here.

[melvill]

Rain, is that $3.50 under Jan for Calgary delivery the spot basis (available right now) or is it a basis contract that was available a while ago?

[charliep]

A quick note is that basis levels are narrowing up from the extremely wide ones but not in all communities/you have to do some shopping. I note Lee's last question. I had a comment from a grain company Calgary area that had $4/t under Nov. basis from people who had crop disaster/couldn't deliver and was re-offering to clients only to find there were no takers (current spot basis $16 to $20 under). If you were a coffee shop with your neighbors, how many would understand basis? Alternatives for keeping grain unpriced without storing?

[cowman]

What's with the ACC? They keep sending out their "propoganda" even though we don't want it. I'm not so much concerned about them sending it to me or my son but my father? He's been dead for 13 years! Like save the couple of bucks! I've informed them at least three times but they still keep sending it! Enough already!

[melvill]

Cowman, I suspect you intended to post this in another forum. What is it they say about old farmers? They don't even retire at passing. Their spirits hang around the place and drive their sons crazy.

Maybe the ACC knows something you don't! (Hope you have a sense of humour.)

[TOM4CWB]

COWMAN,

Maybe you meant the Alberta Canola Producer's Commission?

[charliep]

Just a note to re-affirm Lee's comments. Jan closed yesterday $345.80. That should make for average Albera prices close to $7.50/bu ($330/t). A loony that is dropping like a rock in water and a little more excitement in vegoils are the contributing factors. Canola remains valued at a premium to other oilseeds so any higher prices are going to have to be supported from one of these two factors.

I also highlight there is no carry in old crop futures months. What strategy does this suggest?

[TOM4CWB]

Charlie,

Could be because a person can't get carry from bank interest either?

Are the banks having a hard time after Sept 11, I know of and have heard of lines of credit being pulled on perfectly good business ventures, why should they be doing this?