(Resource News International) –– Demand for canola from Prairie processors continues to build, particularly as the facilities in the Yorkton, Sask. area continue to come on line. Premiums for canola have been offered in some areas.
“Based on the way I calculate margins, the crush for the spot month as of Friday was in the $109 to $111 per tonne range,” said Bill Craddock, a southern Manitoba producer and commodity trader.
This compares with margins of $101-$103 per tonne a month but were down from the $120 range seen two months ago, Craddock said.
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At the beginning of February, values were about the same as they were right now.
“There has certainly been some fluctuations in the value of the crush, but that has had a lot to do with the strengthening and weakening of the Canadian dollar and the price of soyoil and soymeal products in the U.S.,” he said.
Domestic crushers, he said, have started to offer premiums in order to help stimulate movement from producers.
“The two big crushers in the Yorkton area, in particular, need numerous truckloads of canola dropped off each day, especially as production from those facilities begins to pick up,” he said.
That’s a reference to the major new crush plants at Yorkton: one owned by Winnipeg’s Richardson Oilseed Processing, the other by a joint venture between Louis Dreyfus Canada and Mitsui. Dreyfus and Richardson announced their plans for the southeastern Saskatchewan community just hours apart in September 2006.
At current crush margins, domestic processors were said to be making some pretty good money.
Craddock warned, however, that while some processors may be offering premiums, once the company has covered needs, those bids are likely to disappear pretty quick.
Data from the Canadian Oilseed Processors Association (COPA) for the week ended May 5, reveals Canada’s canola processors crushed 85,196 tonnes of canola, which actually represented a decline from the 101,735 seen the preceding week.
However, on a cumulative basis, canola crushings continued to remain ahead of the year-ago pace. During the 2009-10 season, COPA said, 3.318 million tonnes of canola had been processed, compared with 3.14 million at the same time a year ago.
