Glacier FarmMedia COVID-19 & the Farm

Wide canola crush margins show no sign of narrowing

(Photo courtesy Canola Council of Canada)

CNS Canada –– Canola crush margins remain very wide, and are showing no signs of narrowing back in.

As of Friday, the Canola Board Crush Margins calculated by ICE Futures Canada were at about $130 above the November contract, which compares with levels at the same time a year ago of $58.

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.

The current margins are their widest levels in over two years. Concerns over Chinese export demand, due to the looming implementation of new dockage restrictions, were weighing on seed prices on the one hand. Meanwhile, tightening global vegetable oil stocks have boosted that side of the market.

A typical seasonal slowdown has seen the crush pace drop off over the summer months, but domestic processors continue to show good demand overall.

Canada crushed a total of 8.3 million tonnes of canola in 2015-16, according to Canadian Oilseed Processors Association data. That’s nearly a million tonnes above the 2014-15 mark.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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