CNS Canada — Canola crush margins dropped by more than $30 per tonne over the past two weeks, which may be putting a damper on end-user demand.
As of Thursday, the Canola Board Crush Margins calculated by ICE Futures Canada were at about $100 above the March contract, which compares with levels only two weeks ago of roughly $130.
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.
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The nearby crush margin has generally averaged $110-$120 above the futures for the past eight months, only dipping below $100 once during that period.
The declines in crush margins are tied to a combination of strengthening futures and losses in the product values.
The March canola futures contract gained roughly $20 per tonne over the past two weeks, but has stabilized in recent sessions.
Chicago Board of Trade (CBOT) soyoil futures, meanwhile, lost 1.5 cents/lb. over that same period.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
