Canola crush margins improving

Canola crush margins have shown some improvement over the past few months, which should be bringing in good demand from processors.

As of Dec. 11, 2018, the Canola Board Crush Margin calculated by ICE Futures U.S. was about C$63 above the January contract, which was up by C$20 over the past month. That compares with mid-September when the margins were at some of their lowest of the past decade of only C$20 to C$25 above the futures. At this time a year ago, the nearby crush margin was around C$85 above the futures.

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 into the equation.

“We should see the crushing volumes pick up, if they’re locking (the margins) in,” said a trader.

Domestic crushers processed 222,100 tonnes of canola during the week ended Dec. 2, according to the latest data from the Canadian Grain Commission. That marked largest weekly total since August. Total domestic usage during the 2018/19 crop-year-to-date of 3.07 million tonnes is right in line with the crushing pace reported during the same timeframe the previous year, according to CGC data.

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