The words "doldrums" and "slump" have recently been used to describe the canola market. The Jan. 10 trade fell just short of testing the November low of $479.60 per metric ton on the March ICE Canada contract, while adding $2.80/mt to close at $483.30/mt on Friday. This is still close to the lower-end of the range traded over the past 10 weeks.
On Thursday, the Canadian Grain Commission reported modest exports from licensed facilities at 63,400 metric tons in week 23, or the week ending Jan. 6. Assuming that the 411,700 mt shipped in weeks 21/22 over the holiday season was divided evenly between the two weeks, this is the lowest weekly volume shipped in 15 weeks.This marks the lowest volume shipped in this particular week over the past four years, while the five-year average for week 23 is close to 140,000 mt.
Cumulative exports as of week 23 are reported at 4.4094 million metric tons, down 388,200 mt or 8% from the previous year, while commercial stocks are reported at 1.0455 mmt, down 19.5% from the same date in 2017-18 and 20% below the five-year average.
What may bear watching is producer deliveries and cash basis on the Prairies, with recent ICE Canada commentary indicating that producers were current in cash sales and may not be anxious to deliver until mid-February. Producers delivered 230,600 mt in week 23, the smallest volume delivered in 20 weeks or since week 3. Week 23 producer deliveries were higher in each of the past five years, with the five-year average at 353,156 mt. Cumulative producer deliveries are reported at 8.519 mmt, the smallest cumulative volume seen in three years over the same 23-week period.
Friday's average prairie cash basis showed signs of strength at various points in the western Prairies, calculated at $23.04/mt under the March, based on accessible internet bids. This is $1.47/mt stronger than calculated on Thursday, representing an average cash bid of $10.44/bu. or $460.26/mt based on Friday's close which remains short of the $10.50/bu. or even $11/bu. round numbers that are likely prices needed to trigger further sales.
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