Canada Markets

Given the Twitter feed from this week's prairie crop tour, the debate over the potential of this crop will go on and on, with the Western Producer using such terms as "mixed bag" and "wild card" to describe what has been seen. One Twitter response suggested that "good + bad = average," although time will tell. Thursday the group will release their findings from the tour, although the delayed crop in many areas will require further cooperation from Mother Nature over the upcoming month.

At this point in time, it appears that the upcoming crop year will be viewed by the potential in the eastern half of the prairies as compared to the western half. Grain companies have already responded accordingly with new-crop bids in order to position themselves accordingly.

The average prairie-wide basis for hard red spring wheat based on available internet quotes calculates at $1.34/bu under the December future for October delivery, which results in an average bid $4.89/bu across the prairies based on Wednesday's close. By province, this varies from $1.48/bu under in Alberta ($4.75/bu) to $.93/bu under in Manitoba ($5.30/bu). The average basis calculated for Saskatchewan is $1.41/bu under the December future, or $4.82/bu.

The same pricing behavior is seen in the canola market, where many of the new crop deliveries are priced at a premium to the future. Across the prairies, the average basis is $11.78/mt under the November for November delivery, which reflects an average price of $431.02/mt or $9.78/bu. By province, the average basis calculated for November delivery ranges from $16.96/mt under the November in Saskatchewan, which represents a bid of $425.84/mt or $9.66/bu, to an average of $1.77/mt over the future in Manitoba, which reflects a bid of $444.57/mt or $10.08/bu. The Alberta bid is based on an average basis of $11.04/mt under the November, which reflects a price of $431.76/mt or $9.79/bu.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

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