Marketing advisers expect grain companies and crushers to begin offering more specials and offers to attract canola as the crop year runs down.
Buyers need to do something if they want new product. There is little left in farmers’ bins and futures prices have fallen well be-low $500 a tonne.
“I do think they are going to have to bid up to get through to new crop,” said Brian Voth of intelliFarm.
“I think they have covered a lot of their obligations, but I do still think they need to bid up to get more.”
Basis levels have improved by about $5 to $10 per tonne at many elevators and crushers, and brief specials and offers are popping up more often to entice farmers to deliver the remainder of the 2016 crop.
“We’ve been seeing basis levels firm up here,” said Jon Driedger of FarmLink Marketing.
“It’s no surprise, especially when the futures broke lower.”
The combination of attractive futures and basis provided nice cash prices through much of the winter.
Basis levels were wide after harvest, when many farmers were quickly moving damp and otherwise difficult seed to market.
Basis narrowed by $10 to $15 per tonne in some areas as the winter progressed and canola demand from exporters and crusher was strong. They widened again as canola futures rose to $525 per tonne.
However, futures recently sold off dramatically, dragged down by soybeans as Brazil harvests a bin-busting record crop.
May canola futures are now trading near $490 and many farmers are reluctant to sell. That’s probably behind the improving basis levels with farmers having little left and not liking the falling futures.
“They’re having to compete a little harder in order to coax canola out of farmer’s bins,” said Driedger.
FarmLink advisers are seeing southern Manitoba basis levels go from zero to a few dollars positive, while central Saskatchewan bids are about $15 under and central Alberta bids are straddling zero, with a plus $5 to minus $10 range.
Many of those prices come in specials but represent what some farmers have been finding.
Ken Ball of P.I. Financial said specials have become a big part of canola buying this winter with local offers from multiple points when a train is coming in and short-term specials when trains need to be topped up.
“They’ll occasionally perk up $5 to $10, then go back to more normal levels,” said Ball.
“We’re certainly expecting to see basis levels become more attractive.”