Canola basis levels best starting in late spring

(Resource News International) —  For farmers still looking to price old-crop canola, the best basis levels can currently be found for delivery in the late-spring to early-summer period, according to an analyst.

Mike Jubinville of ProFarmer Canada in Winnipeg said there were basis opportunities steady to slightly above the futures in Alberta for the May-June-July timeframe, with basis in the single digits below the futures for Saskatchewan.

Those firm basis levels suggest the commercials have commitments and would like to see some deliveries during that period.

Jubinville suggested farmers may want to lock in the basis on those deferred delivery positions, and then wait for a bounce in the futures to do the pricing.

From a seasonal perspective, the canola futures could see a rally heading into the spring, either from a weather threat, a move in the outside markets, or from short-covering, said Jubinville.

However, “if we wait for the futures to move first, we’ll see basis widen out,” he added.

Looking at new-crop bids, Jubinville said there wasn’t much happening to attract grower interest. There was still a large marketing season ahead, he said, and added that any opportunities to forward price above the $9 per bushel level would likely draw some attention.