Canola crush margins double year-ago level

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Published: October 22, 2019

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Canola seed, oil and meal. (Photo courtesy Canola Council of Canada)

MarketsFarm — Canola crush margins have shown considerable improvement in recent weeks — a sign the commodity is looking cheap compared to its product values.

As of Monday, the Canola Board Crush Margin calculated by ICE Futures U.S. was about $100 above the November contract — a figure up by $10 over the past month and well above year-ago margins of only $45 per tonne.

Crush margins are an indicator of the profitability of the product’s values relative to the seed cost when processing canola. Exchange rates also factor into the equation.

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“Crush margins are way up from this time last year, which will help the crusher,” said a canola trader.

“At the same time, they don’t have to compete with the exporters,” he added, noting the wide margins might not necessarily translate into an increase in canola prices.

Domestic crushers processed 214,500 tonnes of canola during the week ended Oct. 13, according to the latest data from the Canadian Grain Commission. That marked the largest weekly total in two months.

Total domestic usage during the 2019-20 crop-year-to-date, at 2.02 million tonnes, is about 400,000 tonnes ahead of what was crushed during the same time frame the previous year, according to CGC data.

— Phil Franz-Warkentin reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

About the author

Phil Franz-Warkentin

Phil Franz-Warkentin

Editor - Daily News

Phil Franz-Warkentin grew up on an acreage in southern Manitoba and has reported on agriculture for over 20 years. Based in Winnipeg, his writing has appeared in publications across Canada and internationally. Phil is a trusted voice on the Prairie radio waves providing daily futures market updates. In his spare time, Phil enjoys playing music and making art.

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