CNS Canada — Canola crush margins have fallen to some of their lowest levels in more than a decade, which should keep a lid on any upside in prices.
As of Thursday, the canola board crush margin calculated by ICE Futures U.S. was only about $26 above the November contract, which compares with levels a month ago of roughly $38 (all figures C$).
At this time a year ago, the nearby crush margin was around $70 above the futures.
“It hasn’t been this low since the early 2000s,” a canola trader said, adding that the poor margins should limit the upside for prices.
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Crush margins provide an indication of the profitability of product values relative to the seed cost when processing canola, with exchange rates also factoring into the equation.
Domestic crushers processed 140,100 tonnes of canola during the week ended Sept. 9, according to the latest data from the Canadian Grain Commission. That marked the smallest weekly total in two months and compares with the average pace over the past year of about 175,000 tonnes per week.
However, total domestic usage during the 2018-19 crop year to date, at 930,100 tonnes, is still up from the 719,400 tonnes crushed during the same period the previous year.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.
