WINNIPEG, (MarketsFarm) – As canola and other farm commodities made strong gains over the last week, there was something a little strange about things, according to Winnipeg-based trader Bill Craddock.
He said crush margins follow prices for edible oils and meal, as well as the Canadian dollar. It’s all part of the formula used to calculate the daily crush margins.
About two weeks ago, the crush margin for the May canola contract at about C$64 per tonne, but it closed at C$109 per tonne on March 24, said Craddock and he wasn’t entirely sure why it’s climbed so much
He noted the soybean crush also had some wild ebbs and flows. That crush reached US$1.77 per bushel and then fell back to a range of 93 to 95 United States cents. However, on March 23 it climbed to US$1.36/bu. and dipped to US$1.30 on March 24.
“The meal was going up faster than what the beans were going up,” Craddock stated, and noting the crush margins usually fluctuate by a few tenths of a cent rather than several cents.
This might be the result of what’s been happening in the commodities markets in general.