The ICE Futures canola market posted solid gains during the first week of December, showing signs the lows may be in for now. The underlying fundamentals remain supportive, but outside forces will likely set the tone.
Using survey-based data, Statistics Canada cut its call on 2024/25 canola production by more than a million tonnes from its September model-based estimate. The new official reading is 17.8 million tonnes, compared to 19.2 million tonnes of canola grown last year.
The smaller crop means the market will need to do something to ration demand, which would typically lead to rising prices.
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Canadian canola prices hinge on rain forecast
Canola markets took a good hit during the week ending July 11, 2025, on the thought that the Canadian crop will yield well despite dry weather.
Canadian canola exports through the first four months of the 2024/25 marketing year, at about 3.9 million tonnes, are nearly double the pace seen in the previous year, according to Canadian Grain Commission data. Domestic disappearance is also running 12 per cent ahead of the same time a year ago.
The tap will need to shut off at some point. However, that may not necessarily mean stronger prices for farmers.
China has been the dominant export customer for Canadian canola this marketing year, but much of that buying was front-loaded and demand may already be backing off, with supplies thought to be sufficient to last through February.
China is conducting an anti-dumping investigation into Canadian canola. While nothing has been announced, fears that Beijing may impose import duties have made buyers reluctant to do more business.
Canola oil shipments to the United States could be at risk in the New Year. Over 90 per cent of Canada’s canola oil exports went to the U.S. last year, but the threat of tariffs when Donald Trump takes office in January has cast doubt on future trade flows. While the consensus for now is that cooler heads will prevail, uncertainty persists.
U.S. biofuel policy under Trump is another unknown. Guidance on tax credits for use of renewable fuels in the country had been expected to be in place before the end of Joe Biden’s term, but that’s looking less likely. Much of the Canadian canola oil headed to the U.S. is used in the production of biodiesel.
