CNS Canada — The sharp break lower in Canadian canola futures prices on Thursday caused crush margins to rise to their widest levels since January, as the product values have not fallen to nearly the same extent.
Canola Board Crush Margins calculated by ICE Futures Canada were at about $114 above the May contract as of Thursday, up $24 over the past week, and compares with levels a month ago of roughly $77.
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 in to the equation.
Large South American soybean crop prospects and generally bearish technical signals had canola futures in a modest downtrend for most of March (and crush margins moving higher), with some stops hit on March 23 triggering even larger declines.
The May contract settled Thursday at $488.30 per tonne, losing $13.30 on the day and hitting its lowest level since October 2016.
Cash bids in the countryside from both crushers and line companies fell to the same extent on Thursday, with little movement on basis levels quoted by Price and Data Quotes (PDQ).
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.