ICE Canada Weekly: U.S. tariffs may not topple canola market

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Published: April 2, 2025

Some wonder if prairie producers might be considering a return to organic canola, despite the problems caused by the proliferation of GM canola. Photo: Greg Berg

Glacier FarmMedia | MarketsFarm — While canola is potentially among the list of Canadian products to be tariffed by the United States starting April 2, traders should not expect prices to immediately tumble.

Tony Tryhuk of RBC Dominion Securities in Winnipeg said unlike when China imposed tariffs on most canola products from Canada last month, which resulted in a sharp drop in prices, the trade has already factored in the U.S. tariffs. Therefore, he doesn’t think canola prices will severely react.

“My guess is that (the trade) has priced (the tariffs) in and shrugged it off,” Tryhuk added. “It realizes that, at least for old crop purposes, that supply is tight and even in the event they are unable to ship oil and meal across the border in the quantities we were used to doing it, that the excess supply will be sold to China who hasn’t banned seed purchases or into Europe.”

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Since March 17, canola prices consistently rallied with the May contract gaining C$67 per tonne. Over the past week, May Chicago soyoil has seen a sharper rise, adding more than six U.S. cents per pound. Its biggest one-day gain happened on April 1 after U.S. Department of Agriculture Secretary Brooke Rollins announced US$537 million in funding towards biofuel infrastructure despite the lack of a clear biofuel policy, especially in regards to tax credits.

While canola is currently riding on soyoil’s coattails, Tryhuk anticipates a separation between the two in the coming days.

“The soyoil story is a biodiesel story and a tariff story that is going to support the domestic soyoil industry and it’s rallying for the reasons that are negative to canola. We can’t necessarily ship canola oil into (the U.S.) market and take advantage of the pricing,” Tryhuk said. “(U.S. President Donald) Trump has had a negative green policy in general, so I don’t know all the talk of increased biofuel policy or usage will come into effect.”

Tryhuk thinks there will be fewer canola acres this spring than the 21.65 million Statistics Canada projected last month due to dryness in Manitoba and growers acting very cautious with regards to both the Chinese and U.S. tariff situations.

“The market is probably trading a 21 million-acre number rather than 21.7 (million),” he added.

About the author

Adam Peleshaty

Adam Peleshaty

Reporter

Adam Peleshaty is a longtime resident of Stonewall, Man., living next door to his grandparents’ farm. He has a Bachelor of Science degree in statistics from the University of Winnipeg. Before joining Glacier FarmMedia, Adam was an award-winning community newspaper reporter in Manitoba's Interlake. He is a Winnipeg Blue Bombers season ticket holder and worked as a timekeeper in hockey, curling, basketball and football.

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