There might be one more chance to sell 2008 canola at $10 per bushel this year, and Larry Weber of Weber Commodities in Saskatoon recommends that farmers not miss it.
Even current prices are not bad in an historical context, which is remarkable given the 2008 crop’s record acreage, yield and production, Weber told growers Jan. 15 at Crop Production Week in Saskatoon.
Few farmers locked in prices for their canola at last year’s high points in spring and early summer, and a lot of it is still unpriced.
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Weber said oilseed prices have been rising because of tight global oilseed stocks, strong demand and worsening production prospects in South America, which presents growers with another opportunity to sell at a profitable level.
Thomas Mielke, publisher of the influential oilseed market publication Oil World, suggested at an earlier Crop Production Week session that although there is potential for oilseed prices to rally further if the drought worsens in Argentina, Canadians should not hold back from the market now.
He said there is strong international demand for canola and if farmers deliver, allowing exports to remain strong, stocks by the end of 2008-09 will be lower than expected, setting up a stronger price outlook for 2009-10.
Weber said if prices do rally, it will be only for a short time and recommended that farmers get pricing orders in now so sales will be automatically triggered.
“When the world wakes up and finds out we have a problem occurring in South America, I believe soybeans are going to go on a run to $12 (per bu.) sometime in the next three or four months and they will pull canola up with them,” he said.
“For those of you who haven’t sold canola at $10, you are going to get a third chance to do it and for God’s sake, this time do it.”
Weber believes 2009 canola acreage will shrink by about 11 percent because rotations have been pushed to the limit and because of strong fertilizer prices.
