Winnipeg, Jan. 26 (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 Jan. 26, the Canola Board Crush Margins calculated by ICE Futures Canada were at about C$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 (oil and meal) relative to the seed cost when processing canola, with exchange rates also factored in to the equation.
The nearby crush margin has generally averaged $110 to $120 above the futures for the past eight months, dipping below $100 only once during that period.
The declines in crush margins are tied to a combination of strengthening canola futures and lower product values.
The March canola futures contract gained roughly C$20 per tonne over the past two weeks, but have stabilized in recent sessions.
Meanwhile, Chicago Board of Trade soyoil futures lost US1.5 cents per pound over that same period.
