Canada Markets

Cash Soybeans Rise on Futures/Basis Strength

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
Connect with Cliff:
@CliffJamieson
The black line on this chart represents the trend in one of many Ontario cash bids reported by ProphetX. This bid reached $11.49/bu on Tuesday, the highest level seen since December 2018, with crusher/export bids ranging close to $12/bu. The blue line on the lower study shows the basis for this particular bid at $2.29/bu over the November, close to the strongest basis seen in almost four months. (DTN ProphetX chart)
The black line on this chart represents the trend in one of many Ontario cash bids reported by ProphetX. This bid reached $11.49/bu on Tuesday, the highest level seen since December 2018, with crusher/export bids ranging close to $12/bu. The blue line on the lower study shows the basis for this particular bid at $2.29/bu over the November, close to the strongest basis seen in almost four months. (DTN ProphetX chart)

A move higher in soybean futures in combination with a strengthening basis has seen some Ontario soybean bids reach 2019 highs this week. As seen on the attached chart, a random Ontario cash market plotted using ProphetX shows the October bid at $11.49/bushel, while some exporter and crusher bids were shown nearing the $12 per bushel (/bu) level. This compares to a bid of $11.41/bu this on this date in 2018 and the three-year average of $11.63/bu for this date, while reflects a correction from the $10.65/bu low reached in September.

The blue line on the lower study shows that in addition to strengthening futures, basis is also seen strengthening. This chart shows basis at $2.29/bu over the November, close to the strongest basis seen in 2019 of $2.36/bu on this chart, while Hamilton bids are shown as high as $2.75-$2.80/bu over.

The most recent CGC Exports of Canadian Grain and Wheat Flour report for the month of August shows total exports of 324,300 metric tons (mt), up from 25,900 mt in the same month in 2018 and the three-year average of 39,800 mt for the same month.

This pace of movement may continue into the fall months. The range of basis reported for the province has strengthened from $2.03 to $2.70/bu over the November in early September to $2.28/bu to $2.80/bu over as of October 8, despite a record carryout of 700,000 mt estimated by Statistics Canada as of August 31.

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

Follow him on Twitter @Cliff Jamieson

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The black line on this chart represents the trend in one of many Ontario cash bids reported by ProphetX. This bid reached $11.49/bu on Tuesday, the highest level seen since December 2018, with crusher/export bids ranging close to $12/bu. The blue line on the lower study shows the basis for this particular bid at $2.29/bu over the November, close to the strongest basis seen in almost four months. (DTN ProphetX chart)

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