Canola crush margins half of year-ago level

CNS Canada — Canola crush margins in Western Canada are at about half the level as seen at the same point a year ago.

As of Monday, the Canola Board Crush Margin calculated by ICE Futures Canada was about $56 above the November contract, which compares with levels a month ago of roughly $71.

At this time a year ago, the nearby crush margin was $115 above the futures.

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.

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“Crush margins are way off their highs from a year ago, which is why the crushers aren’t in here doing anything other than on a scale-down basis,” a Winnipeg trader said of the reluctance of end-users to bid up the market at current levels.

Canadian processors crushed 184,831 tonnes of canola during the week ended Sept. 27, or 83.4 per cent of capacity, according to the latest report from the Canadian Oilseed Processors Association.

A total of 1.28 million tonnes of canola have been processed during the crop year to date, which is slightly behind the year-ago pace of 1.35 million tonnes.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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Phil Franz-Warkentin writes for MarketsFarm specializing in grain and commodity market reporting.

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