Relatively strong canola bids currently available in Western Canada may not be around for much longer, according to an analyst who recommends farmers price what they can now before the inevitable downturn.
ICE Futures Canada canola contracts have been testing upside resistance recently, and the cash bids have strengthened as well, said Errol Anderson of Pro Market Communications in Alberta.
However, once weather concerns in parts of Western Canada subside and attention turns to those crops that are doing reasonably well, he expected to see a downturn in prices.
Expectations for a decline in the outside equity and crude oil markets, and the potential for a deflationary market in the fall, would also spill over to weigh on canola values, he said.
Given the current strength of the market, and the likelihood of an eventual downturn, Anderson recommended producers price as much canola as they feel comfortable with for deferred delivery.
“Beyond that, I would just load up on puts,” he added.
Spot prices for canola delivered to the elevator can currently be found in the $13 to $13.40 per bushel range across Western Canada, according to the latest Prairie Ag Hotwire data.
New-crop bids are slightly weaker, topping out at just under $13 per bushel.