BRANDON — Farmers might take a friendlier look at seeding canola this spring after recent price action made the crop look relatively more profitable than wheat, says Informa Economics’ Chris Ferris.
Canola priced for 2015 had a significant per acre advantage over spring wheat last summer.
That was not unusual because canola often is more profitable than wheat.
Canola’s advantage disappeared after August, raising ideas that wheat acres would increase.
But since Jan. 1, canola has held firm while spring wheat futures have fallen.
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“We’ve been getting a bit of a bounce here,” Ferris told the Manitoba Canola Growers meeting during Manitoba Ag Days Jan. 20.
“Canola has been strengthening against spring wheat.”
Farmers keenly watch crop-versus-crop revenue comparisons as seeding approaches, with many throwing undedicated acreage into crops that appear to offer the best profit potential.
That looked bad for canola acreage recently.
Some profitability projections, including one from Manitoba Agriculture, showed canola as one of the worst crops to grow this year.
The department projected at the beginning of January that farmers would lose almost $20 per acre growing canola (including all costs), while they would make almost $11 on spring wheat.
However, wheat has now given up all the gains it had made in the October to December rally, while new crop canola futures are the strongest they have been since August.
Now canola again appears to offer farmers better returns.
“That’s because wheat has been falling,” said Ferris.
“That may encourage a bit more acres here for canola.”
ed.white@producer.com
