John De Pape

[John De Pape @JohnDePape1]

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[John De Pape @JohnDePape1]

Manitoba, Alberta and BC have all joined Saskatchewan in doing away with Daylight Savings Time.

For futures market watchers, that means a shift in our schedules, not because we are no longer shifting our clocks, but because in the US, they will be.

After Nov 1, when Chicago opens at 8:30am local time, it will be 9:30am in Manitoba and 8:30am in Alberta. And when Chicago closes at 1:20, it will be 2:20 in Manitoba and 1:20 in Alberta.

I sure hope ICE will change its trading session hours to match Chicago. If not, ICE will be open for an hour before Chicago opens and will close an hour before Chicago closes.

And that just won’t work.

There’s far too much riding on arbitrage and spreading between canola and beans and oil and meal. And so much of that happens in the opening and closing hours of trade.

Stay tuned.
#Canadagrain #canola #futures
https://t.co/bTBuc94UIs

[John De Pape @JohnDePape1]

When we can't get good canola market signals from public basis levels, we can always look at spreads.
Current basis levels are basically flat for the whole year.
Back end spreads are tight - tells of market expectations for late year trightness. Bullish to basis.
#canola #grainmarkets #canolamarkets #futures
https://t.co/bTBuc95sy0

[John De Pape @JohnDePape1]

@rgstone1 @RyanBonnett1 @spiga_dorata Low protein CWRS will look a lot like winter wheat across the border. Might be worth the trip.

[John De Pape @JohnDePape1]

It doesn't stop there. Cash durum tends to trade at premiums to cash CWRS - typically $50/tonne or more. But not now - quoted about $30/tonne DISCOUNT.
And cash durum vs Mpls futures - same thing - big discount to "normal". So its KC above MPLS above CWAD. the world is upside down. #durum #CWRS #wheat #grainmarkets https://t.co/bTBuc95sy0

[John De Pape @JohnDePape1]

I don't know what crops you're looking for Jim, but I have some data for SW Sask - not 15 yr averages but I've got:
CWRS
2yr 275.05
5yr 342.68
10yr 293.89

CWAD
2 yr 300.42
5 yr 418.31
8 yr 362.43

Canola
2 yr 615.94
5yr 719.42
10yr 610.37

Need anything more?
#grainmarkets #grainprices

[John De Pape @JohnDePape1]

Understanding your wheat basis.

When the posted basis is flat with a rising US futures, our basis in CAD gets worse. Sure, our price may get a bit better, but we are losing ground to our US counterparts. #wheat #basis #grainmarkets

[John De Pape @JohnDePape1]

The huge drop in canola in the last two days feels like the longs are running for cover. But OI has actually gone up.
New shorts AND new longs.
Hmmm....

https://t.co/NkPzMGT0Hk
#canola

[John De Pape @JohnDePape1]

Second chart of the day
Canola spreads getting whacked.

And yesterday, spread volume involving the May was 60% of total May volume.
Heavy front end selling or heavy bear spreading?

[John De Pape @JohnDePape1]

Chart of the day
Everyone's watching canola futures take it on the chin, but country basis is too.

Are they taking protection?
Or is this reflecting the new reality of a challenging crush market?

The next few days will tell the tale.

[John De Pape @JohnDePape1]

Ouch.
US tax credits for biodiesel just announced. Canola got zero.
Gonna hurt crush margins and likely crush volumes too.

#canola

[John De Pape @JohnDePape1]

"Exotic" cash contracts mimic options. I just heard about one where the farmer was offered a $0.35/bu premium on an existing canola contract if Nov futures were above a set level in Sept. - and if so, he would owe them double the amount of canola - the second half at the new (higher) price.

Sounds pretty good - but an options strategy I just looked at would pay a $0.95/bu premium with no obligation to sell more cash.

Get the full analysis on The Trading Floor.
https://t.co/reWPjWo1y4

#canola
#graincontracts

[John De Pape @JohnDePape1]

Deliveries on Jan futures don't makes sense.

A grain company (reportedly Viterra) took delivery of Jan futures and is in the process of shipping it to Vancouver to finish an export sale.

The current "best bid" in the prairies - according to ICE - was about 35 under when deliveries were taking place.

So - why does a grain company take delivery and ship canola at a zero basis (futures delivery) when they are only paying farmers $35/tonne less than that?

There's more to this story than meets the eye. For more detailed analysis and what it means to cash prices going forward, register as a member of The Trading Floor and subscribe to my analysis page.
https://t.co/reWPjWo1y4

#canola

[John De Pape @JohnDePape1]

Futures deliveries are being forced on Jan canola while best bid in the par delivery region is about 35 UNDER.
Either someone hasn't done their math homework or the posted bids - including those provided to ICE - are worthless and, in fact, misleading.

For more detailed analysis:
https://t.co/reWPjWo1y4

[John De Pape @JohnDePape1]

Chart of the week
What's wrong with this picture?

This chart shows the average canola basis in June in each of the least 8 years, associated with each year's carry out expressed as stock-to-use.
It shows what we intuitively know - the lower the stocks, the higher the price (basis). But it also shows the current situation for June 2025 - and its WAAAY out of whack.
This tells me basis will get better, if not much better.
For a more detailed view, head over to The Trading Floor.
https://t.co/reWPjWo1y4
#canola

[John De Pape @JohnDePape1]

Fun fact
Canola open interest is down 51,058 contracts (down 17%) since the day before Stats Can's lower production estimate was released on Dec 5.
Just the week before Stats Can, funds added about 28,000 contracts to their short, ending up 119,523 short (46.7% of total OI).
I'm gonna stick my neck out and say that the funds are turning the corner, recognizing we could be in for a tight year.

#canola
#Futures

[John De Pape @JohnDePape1]

Chart of the week
Do basis and spreads react the same way to market forces?
Short answer - yes.

A while back, some analysts were very bullish on canola - with robust exports and potentially smaller Stats Can production. But basis was very low and spreads were very wide - telling a different story.
Now, after the market dropped about $80/t, its making a rebound. And spreads and basis are telling a different story.

It's all about timing.
#canola

[John De Pape @JohnDePape1]

Trump announces a 25% tariff on anything imported from Canada and canola futures drop $20. BUT soyoil futures rally $1.30.
- Our biggest canola exports to the US are oil and meal - should get the attention of the crushers.
- Board crush margins improved by about 27% this morning.
In terms of net margins, there is nothing to stop crushers from continuing to sell products into the US.

Seems to me that the market has absorbed the effect of the tariff already.

[John De Pape @JohnDePape1]

@LeftFieldCR Good idea - how much more can they take though when we're crushing at or near capacity as it is?