Canola crush margins continue downward slide

Canola seed, oil and meal. (Photo courtesy Canola Council of Canada)

CNS Canada — Canola crush margins have continued their downward slide, falling to their lowest levels in 10 months over the past week.

As of Friday, the Canola Board Crush Margins calculated by ICE Futures Canada were at about $86 above the March contract, which compares with levels a month ago of roughly $126.

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.

The nearby crush margin was last below $90 in May 2016, with recent losses in many vegetable oil markets behind the declines.

Reports of increasing output sent Malaysian palm oil prices to their lowest levels in three months this week, while Chicago Board of Trade soyoil hit its weakest levels in four months.

However, canola futures did not follow the product values lower to the same extent, with underlying concerns over tightening supplies and supportive chart signals keeping the ICE Futures Canada contracts rangebound overall.

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

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