Margins reach ‘staggering’ levels for canola crushers

Sep 28, 2022

Canola crush margins are leaving one analyst at a loss for words.

“They have soared up to levels that are just beyond anybody’s description,” said Ken Ball, commodities futures adviser with PI Financial Corp.

“I have run out of adjectives to describe them.”

His crush index hit $325 per tonne yesterday, representing a gross margin of $7.37 per bushel.

“In the U.S., a $1.50 per bu. margin for beans is considered fantasyland,” he said.

You might expect to see those kinds of “staggering” margins if Canadian farmers were harvesting a bumper crop of 22 million tonnes of canola or something like that, but that is not the case.

Statistics Canada forecasts 19.1 million tonnes. Ball thinks it will be sub-19 million tonnes because most farmers he talks to say yields are coming in a few bushels per acre lower than anticipated.

“The balancing factor is that Australia seems to be on their way to another whopper canola crop,” he said.

The Australian government forecasts 6.6 million tonnes of production, down two percent from last year’s record-shattering crop.

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Video: Winter Canola Trial in Mississippi | Can It Work for Double Cropping? | Pioneer Agronomy

Can winter canola open new opportunities for growers in the Mid-South? In this agronomy update from Noxubee County, Mississippi, Pioneer agronomist Gus Eifling shares an early look at a first-year winter canola trial and what farmers are learning from the field.

Planted in late October on 30-inch rows, the crop is now entering the bloom stage and progressing quickly. In this video, we walk through current field conditions, fertility management, and how timing could make this crop a valuable option for double-cropping soybeans or cotton.

If harvest timing lines up with early May, growers may be able to transition directly into another crop during ideal planting windows. Ongoing field trials will help determine whether canola could become a viable rotational option for the region.

Watch for:

How winter canola is performing in its first season in this Mississippi field

Why growers chose 30-inch rows for this trial

What the crop looks like as it moves from bolting into bloom

Fertility strategy, including nitrogen and sulfur applications

How canola harvest timing could enable double-cropping with soybeans or cotton

Upcoming trials comparing soybeans after canola vs. traditional planting

As more growers look for ways to maximize acres and diversify rotations, experiments like this help determine what new crops might fit into existing systems.