Manitoba Canola Growers Association
Concerned about Basis Levels

On November 4th/03, the Board of Directors of Manitoba Canola Growers Association (MCGA) met with various grain handling representatives and members of the Winnipeg Commodity Exchange. (WCE)

"We have been aware of producers concerns regarding basis levels for some time" says Bruce Dalgarno, president of MCGA. "Basis levels appear to be unusually wide, and it is necessary for members of MCGA to know the reasons for this wide basis."

Several factors have led to the basis levels we are experiencing today, according to grain handling officials. One: There was a good canola crop in much of Manitoba, and, in fact, Western Canada this year. Two: Farmers had not pre-priced as large a portion of expected fall deliveries as would usually be the case. Three: Canola producers across Canada continued with heavy deliveries in an attempt to generate cash for fall payment needs.

"These reasons, plus a drop in cash canola values in Vancouver as compared to the futures, have led to these unusual basis levels", says Dalgarno. "At the present time, we are relatively confident that the situation will soon begin to correct itself. Producers should consider other options, such as storing canola for future delivery, and/or taking out the cash advance to cover cash flow needs."

MCGA is compiling a fact sheet in conjunction with the Winnipeg Commodity Exchange on what makes up a canola basis, and will attempt to explain the reasons for volatility in the basis levels. It will be available shortly.

MCGA represents over 10,000 canola producers in Manitoba.

The Manitoba Canola Growers Association is a non-profit organization made up of producers who share the goal to develop and promote the development and marketing of Manitoba grown canola.

For further information, please contact:

Bruce Dalgarno-President, MCGA phone 204 849-2193
Bill Ross-Executive Manager MCGA phone 204-745-2178