(Resource News International) –– The sharp weakness in the Canadian dollar over the past week has allowed domestic crush margins to see some improvement. However, canola futures have also shown some strength, limiting the potential gains in the crush.
Canola crush margins relative to the nearby July contract have improved by C$13 per tonne over the past week, to the current level of roughly C$119 per tonne above the futures, according to data provided by ICE Futures Canada.
While the margins have shown some improvement, they are still rangebound overall, according to a canola trader who follows the crush margins.
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Lentil prices on the Canadian Prairies eased back during the week ended July 28, said Levon Sargsyan, broker with Johnston’s Grain. Sargsyan noted that’s due to the recent rains that brought relief to some of the dry areas of the region.
“When the dollar goes down, the canola seems to hold pretty steady, so we don’t really get the improvement in the crush margins,” said the trader.
“The crush margins have held remarkably stable for quite awhile,” he added, noting that the margins have held within a tight range since January.
The trader said the stability in the crush margins may be partially due to the extra crush capacity coming online in Western Canada, which is bringing more stability to the canola market.
Canada has crushed 3.54 million tonnes of canola during the current crop year, as of May 19, which compares with 3.29 million tonnes at the same time a year ago, according to Canadian Oilseed Producers Association data.
