CNS Canada — Canola contracts on the ICE Futures Canada platform have traded within a wide range over the past month, but crush margins continue to hover around the $100 mark.
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 Monday, the canola board crush margin, calculated by ICE, was at about $96 above the most active May contract.
The margins took a $6 hit on Monday, due to a combination of rising Canadian futures, a drop in CBOT soyoil and a firmer Canadian dollar, according to participants.
However, while the futures have traded within a $30 range over the past month, the crush margins have generally held within $5 of the $100 per tonne mark.
At this time a year ago, the margins worked out to about $235 above the futures, as the logistics problems hampered rail movement across the Prairies.
While the current margins are a far cry from those highs, they remain profitable, and domestic processors continue to show solid demand.
Crushers are running ahead of last year’s pace, with 4.25 million tonnes processed in the crop year to date, as of last Tuesday (March 3), according to the latest Canadian Oilseed Processors Association update. That compares with 4.04 million tonnes at the same point the previous year.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.