The ICE Futures canola market saw some choppy activity during the week ended Feb. 17, generally holding rangebound just below the highs hit earlier in the month.
The relatively steady tone in canola came despite broader gains in outside vegetable oil markets, as canola had been looking overpriced compared to competing oilseeds for some time.
The drought and resulting crop losses that caused canola to rally earlier in the marketing year have been well known for some time, with little reason for further gains in the current environment. Meanwhile, soybeans are finally seeing some independent strength of their own, as South American production prospects have deteriorated.
Read Also
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.
While parts of Argentina and Brazil have finally seen much-needed rain, the moisture may be too little, too late, and a number of forecasters came out with lower estimates for the continent during the week.
Canola crush margins are not an exact science, but do provide an indication of the value of the seed relative to the products. Spot margins had been in negative territory for some time, hinting that canola was overpriced, but moved back into the positive area during the past week. While crushers were likely always making money, despite what the headline margin numbers said, they are likely even more profitable now — even with canola still trading near record levels. As a result, demand should be expected to remain solid, which will in turn necessitate more rationing.
Exports and the domestic crush both continue to run behind the average pace, as the market has worked to ration demand. However, buying interest will likely need to be curtailed if Canada will keep from running out of supplies.
With an estimated 14.5 million tonnes of available canola supplies to start the crop year (production and carry-in combined), the 3.6 million tonnes of exports and nearly five million tonnes of domestic usage through the first 28 weeks of the crop year reported by the Canadian Grain Commission account for about 59 per cent of the total stocks. While nearly three million more tonnes of canola were exported during the same time frame the previous year, and the domestic crush was up by about 800,000 tonnes, the total usage at that time only accounted for about 53 per cent of the 23 million tonnes on hand to start the marketing year.
So while exports and the domestic crush are both down on the year, the pace relative to the supply is still higher. That pace is likely unsustainable, but whether or not canola futures need to go higher remains to be seen.
It doesn’t feel like it yet, but spring is not that far off and the tight old-crop situation will soon move to the back burner in favour of the new-crop production prospects. Many parts of Western Canada remain on the dry side, although others have seen ample snowfall this winter, leaving plenty of uncertainty on that front.
