Canada Markets

November canola lost ground during today's session, closing $5 per metric tonne lower at $416.50/mt. Despite the weakness, canola trade fared better than both soybean and soybean oil futures, both of which reached new contract lows, with soybeans moving below the pychologica1 $10/bu level while also closing below long-term support on the monthly chart at $9.92 3/4/bu, down 15 3/4 cents.

The weakness seen in the U.S. and global oilseed markets, under pressure from a rising U.S. dollar, non-commercial liquidation and expectations that the USDA will increase the U.S. crop size this week are weighing heavily on canola prices.

As a result, cash bids on the Prairies are falling. Although last week's 2013/14 stocks fell within the lower end of expected levels and this week we are seeing a dump of summertime snow in the western Prairies with the possibility of four to five degrees of frost in some areas of the Prairies over the week, basis levels are slowly widening, with today's cash basis calculated at $22.48/mt under the November future, which reflects a spot price of $8.94.

Exporters and end-users may be putting on a brave face at present as bids below $9/bu and maybe even below $10/bu will be a tough sell for farmers who will be less inclined to take on the risk of a forward sale given the risks faced in both quality and quantity of this year's crop.

At the same time, both will have far less seed to work with than the previous year, while more aggressive bidding for tight supplies may be the nature of the business as we look forward into the crop year.

DTN 360 Poll

Will the government's freight initiatives continue to push higher volumes of grain down the track? Is this fall's service levels acceptable in your area? Please weigh in on DTN's 360 Poll found at the lower right of your Home Page.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

© Copyright 2014 DTN/The Progressive Farmer. All rights reserved.