With canola futures on the ICE Futures Canada platform undergoing some extreme declines over the past few sessions, there have been worries that cash bids may also follow suit.
However, some analysts are confident the fundamentals remain solid enough that any push lower in the cash market will only be temporary.
One farm source said he sold a good chunk of his new-crop canola on the weekend and was still able to get roughly $12 a bushel for that canola.
The reasoning given for the sale now was that the producer did not want to take a chance on new-crop values for canola dropping to $7 a bushel or lower in the fall.
"My thoughts are that farmers should not worry too much about new-crop bids," said Ron Frost, an analyst with Frost Forecast Consulting of Calgary.
He was certain that the market will be able to transition the focus back to the oilseed fundamentals instead of the macroeconomic issues currently generating the downward price slide in values.
"With basis levels remaining quite high and the strong usage pace of canola (both old- and new-crop) there is just not enough of a cushion within the oilseed complex (that is including the large U.S. soybean area) to allow the market to see bids drop much from where they currently sit," Frost said, noting this comes despite the possibility of a summer weather scare.
Frost acknowledged there probably still is a further $20-$40 per tonne downside risk in canola futures in the short term, based on the funds continuing to bail out of long positions.
"There will be plenty of opportunities to sell canola at the $12 per bushel or better level in the cash market, so I think it is time to ignore this washout in value by the funds," he said.
Frost added the tug-of-war between pretty tight, pretty positive fundamentals, against the recurrence of a bearish macroeconomic influence and the funds willing to sell, will continue for some time yet.
"However, I also think that this will sort itself out and once that $20 or $40 per tonne drop occurs, I am going to be ready to be a buyer again," Frost said.
Current cash bids for old-crop canola, delivered to the elevator in Saskatchewan, range from $12.14 to $14.13 a bushel, in Manitoba from $13.30 to $14.20 and in Alberta from $13.62 to $14.29, according to Prairie Ag Hotwire data.
New-crop bids in Saskatchewan, delivered to the elevator, range from $11.94 to $12.30 per bushel, in Manitoba from $12.05 to $12.68 and in Alberta from $11.94 to $12.45.