CNS Canada — Canola crush margins have improved considerably over the past few weeks, to sit at some of their best levels of the past year.
Crush margins provide an indication of the profitability of the product values relative to the seed cost when processing canola, with exchange rates also factoring into the equation.
As of Friday, the Canola Board Crush Margin calculated by ICE Futures Canada was at about $107 above the nearby July contract, which compares with levels closer to $84 a month earlier and the year-ago level of $71.
“I don’t remember seeing (margins) at this level in some time,” said a market watcher.
With the end of the crop year fast approaching, and supplies supposedly tightening in Western Canada, he added margins are likely to deteriorate in the coming months as end-users will need to pay up for supplies.
In the meantime, the domestic crush continues to run at a record pace.
As of Wednesday, Canadian canola processors had crushed 6.659 million tonnes of canola during the crop year-to-date, which compares with 5.908 million at the same point the previous year, according to data from the Canadian Oilseed Processors Association.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.