ICE Futures canola contracts held within a narrow trading range during the week ended Wednesday, as participants await fresh market-moving news.
While the sideways trading range could persist in the near term, an analyst said new-crop futures were at decent levels and encouraged farmers to do some forward pricing.
The November canola contract settled Wednesday at $498.10 per tonne, while January traded at $502.30.
While average basis levels for new-crop canola of $35-$40 per tonne below the futures are not that great, “we don’t want to see this $500 level disappear on us,” said commodity investments advisor David Derwin of PI Financial.
Derwin recommended growers price some of the 2019-20 crop now, and worry about the basis later.
Old-crop basis levels are a bit more favourable, but they’re still wider than farmers would like to see. Derwin said $11 per bushel ($485 per tonne) was a cash target many growers were likely looking at.
However, current basis levels in the $15-$20 per tonne range below the futures work out to cash bids of $10.50-$10.65 per bushel.
The U.S. Department of Agriculture releases a number of supply/demand reports on Friday. Any surprises in those reports, and resulting moves in soybeans, could provide some nearby direction for the canola market.
— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.Tagged basis levels, canola contracts, canola futures, ICE Futures, January, new-crop, November canola, old-crop, soybeans, USDA