Prairie grain markets are as quiet as the grave right now, analysts say.
But if farmers listen closely in the next few weeks, they might occasionally hear a good offer trying to break out of the tomb.
“We saw an $11.50-over basis (on canola in central Saskatchewan) last week. For April, that’s a phenomenal basis. That’s a July basis,” said Saskatoon commodity broker Larry Weber, noting that farmers have their minds on matters other than delivering grain.
“Everyone’s preoccupied with seeding and road bans.”
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In many years, as soils thaw and seeding looms, sudden premiums and basis deals flare in the market as buyers try to catch producers’ attention and give them reason to get out of their fields and machine sheds to haul grain to an elevator.
But analysts say a glut of most grains and oilseeds has dulled hopes for a general spring rally.
“The markets are quiet,” said John Duvenaud of the Wild Oats markets newsletter.
“It’s like the low before the storm. Everybody’s half-bearish.”
Canola may be the crop with the best chance for a sudden spring rally. It tends to be most affected by weather events.
“Just watch for the rallies,” said Charlie Pearson of Alberta Agriculture.
Feed grains are also a candidate for sudden little cash market rallies in Alberta.
“Just be alert,” said Pearson.
“Be aware of the cash market. A combination of good premiums and basis levels can help you.”
Weber said farmers who still have lots of pulses and special crops in their bins have a poorer prospect of significant deals offered during seeding.
“Processors have been able to push (the price) 10 cents and get all they want,” said Weber.
“We still have an inordinate amount of special crops left.”
Duvenaud agreed.
“Buyers have been loading up. They’ve got all they want. They’re looking at new crop already.”
For about two months producers have had trouble finding buyers willing to take canaryseed, mustard, peas and lentils, Duvenaud said.
Canaryseed and mustard in particular have a grim outlook.
“There’s lots and lots around. We could not have a crop this summer and there’d still be enough to get us through,” he said.
For farmers looking to get rich fast, selling lots of flax and high quality oats would be the answer, analysts say.
But after a winter of high prices, producers have almost none of those crops left.
“Anyone who has either one of those left is a heck of a bigger poker player than I am,” said Pearson.
Duvenaud said the market is pessimistic right now and there is little reason to expect significant overall price rallies unless a major weather event occurs.
But longer term demand for grain still exists in the world economy, so while prices may be weak, they won’t collapse.
“There are lots of indications that commodities will be strong in a year or two or three or four,” said Duvenaud.
“Lots of people want to be long and are long, but the fundamentals say sell, sell, sell. We’ll probably stay like that for a while.”
