Canola crush margins hit best levels in months

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Published: December 3, 2015

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 (Dave Bedard photo)

CNS Canada –– Canola crush margins have improved considerably over the past few weeks, hitting levels not seen in over six months, as vegetable oil prices rose and the Canadian dollar dropped.

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.

As of Thursday, the Canola Board Crush Margin calculated by ICE Futures Canada was at about $80 above the January contract, which compares with levels closer to $48 a month earlier.

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The January canola contract has seen some choppy activity over the past month, but was trading at roughly the same levels by Thursday as it was during the first week of November.

However, vegetable oil markets climbed sharply over the period, with CBOT soyoil improving by roughly three cents/lb. in recent weeks. Meanwhile, the Canadian dollar has lost nearly two cents relative to its U.S. counterpart over the past month, to trade below US75 cents.

The domestic crush pace was already running ahead of the year-ago level before the latest improvement in margins, and the improved profitability should help that trend continue.

As of Nov. 25, Canadian canola processors had crushed 2.486 million tonnes of canola during the crop year to date, which compares with 2.269 million at the same point the previous year, according to data from the Canadian Oilseed Processor Association.

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

About The Author

Phil Franz-Warkentin

Phil Franz-Warkentin

Editor - Daily News

Phil Franz-Warkentin grew up on an acreage in southern Manitoba and has reported on agriculture for over 20 years. Based in Winnipeg, his writing has appeared in publications across Canada and internationally. Phil is a trusted voice on the Prairie radio waves providing daily futures market updates. In his spare time, Phil enjoys playing music and making art.

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