WINNIPEG — Canola crush margins have improved considerably over the past few weeks and are now sitting at near the best levels of the year.
Crush margins provide an indication of the profitability of the product values compared to the seed cost when processing canola. Exchange rates are also factored in to the equation.
As of May 27, the Canola Board Crush Margin calculated by ICE Futures Canada was $107 higher than the nearby July contract, compared to levels closer to $84 a month earlier and the year-ago level of $71.
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“I don’t remember seeing (margins) at this level in some time,” said a market watcher.
The end of the crop year is fast approaching and supplies are tightening in Western Canada. As a result, crush margins are likely to deteriorate in the coming months because end users will need to pay up for supplies.
In the meantime, the domestic crush pace continues to run at a record pace.
Following a couple of slow weeks, last week’s canola crush was a strong 179,485 tonnes, up 10.4 percent from the previous week, said the Canadian Oilseed Processors Association.
Crush capacity use was almost 87 percent, topping the year average of 81.6 percent.
Canadian canola processors crushed 6.659 million tonnes of canola during the crop year to date, up from 5.908 million at the same point the previous year, according to data from COPA.
