Crush Margin

[LEP]

Crush margins are low, doesn't bode well for canola prices to get some strength from the domestics.

Make sure you bin sound canola.

It might be there a while.

[charliep]

The link for ICE futures Canada canola crush margin. It has the exchange included and reports in both US and Canadian dollars. COPA is the simple crush margin with canola in Canadian dollars and soy oil/meal in US dollars.

[URL=https://www.theice.com/marketdata/reports/2]ICE canola crush margin[/URL]

A reminder that both ICE and COPA crush margins are indexes based simply on futures and not real margins that the crushers receive. Cash crush margins based on actual canola oil and meal sales versus price paid to farmers would be different.

[TOM4CWB]

Good point Charlie,

Many Canola oil sales were made last spring [Nice Nexera basis was offered to entice acres] at good prices. They should return good profit now to crushers.

Nice to see above average Canola yields on our first fields harvested!

[vvalk]

So Charlie what are the more realistic crush margins right now and how does that compare with historic margins?

[charliep]

I suspect the crush indexes are on the low end of history but then I would have to go back to years of tighter canola carryovers. But I guess your question is whether crushers have made excess profits in the past. Don't have an opinion. I suspect crusher profits are based on running an efficient business operationally, managing logistics/product flows and using futures to effectively manage price/margin risk.

[Braveheart]

I can't imagine how much cash it must take to run a crush operation. Buying seed from farmers, paying wages, waiting for customers payment to come back. Deep pockets must be required.

[charliep]

Having said, the canola crushing industry keeps growing in western Canada. Mush be a sign of profit or it won't happen. Will be interesting to see if one of the plants in Manitoba converts to soybeans. Also think many of the plants in Eastern Canada can crush soybeans or canola.

Will let everyone hear debate the merits of value added. I just look at the numbers. Tom may be right on production but not my focus. I still like to look at the demand side/what is needed. Even more important is the short term logistics side with the job the market to match what is needed (actual export sales/crusher needs) versus what is being delivered by farmers. Basis is the play in here as much as futures.

[Guest]

well farmers lack of deliveries should be telling market that. we can't grow it for less than $10 . everyone keeps saying market waiting on canola to be harvested . I bet it's half off around here and all points are wanting sept spot canola ? haven't saw that for years ! maybe crushers are gonna have to get more efficient like we have to every year . our profit on $9 canola at 37 bpa is next to sfa . but market doesn't give a shit , nor do some crushers

[farmaholic]

Its simple, if they'd pay more they'd get more.

Pass it on, or would the sensitive customers rather lower their standards to use soy and palm oil.