(Commodity News Service Canada) — Canola crush margins continue to rise, keeping the domestic processors as active buyers in the market.
The canola crush board margin, as quoted by ICE Futures Canada, was sitting at about $104 per tonne above the nearby January futures as of Monday, up by over $10 from the previous week and nearly $25 above the levels seen a month ago.
The crush margin gives an indication the profitability of the processors by showing the difference between the cost of canola seed and the product values. The current strength in the margins is tied to gains in CBOT (Chicago Board of Trade) soyoil values and the weaker Canadian dollar, according to market analysts.
Traders noted that the crushers were already making good profits when margins were in the $80 per tonne range in November.
“With the way the margins are, I think we’ll see a very strong crush pace right into March/April,” said a market analyst. The fact that Canadian canola production ended up larger than original expectations will mean the crushers should have no difficulties obtaining supplies, he added.
“They are very well positioned to keep the crush pace running full steam ahead into April,” said the analyst.
Canada has crushed 2.25 million tonnes of canola during the current crop year, as of Wednesday (Dec. 15), which compares with 1.45 million tonnes at the same time a year ago, according to the latest Canadian Oilseed Producers Association data.
At the current crush pace, some analysts are predicting the total crush in 2010-11 will surpass six million tonnes, which would be well above the previous record of 4.8 million set in 2009-10.