If there is one thing canola trading for the week ended July 15 proved, it’s that the drought across the Prairies remains a powerful influence on prices. The charts proved another thing as well: there’s a tremendous amount of volatility in the canola market.
Prices rallied for six consecutive sessions from July 7 to 13, which saw the most traded November contract vault from $790.90 per tonne on July 7 to $916.80 on July 13. At one point during that rally, November touched on a new high of $949 per tonne, which generated thoughts that prices hitting and exceeding $1,000 were close at hand.
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Canola market sees up and down week
Canola futures endured a topsy-turvy week ended July 17, 2025, with most ICE contracts seeing net gains of about C$15 per tonne.
The drought, which has cut deep into canola yields, will see production very likely fall well short of the 20 million tonnes initially anticipated. Although one private consultancy put forth an estimate of 19.1 million tonnes, a number of traders and analysts suggest something more along the lines of 16 million to 18 million tonnes. In turn those production declines will ramp up worries about tight supplies, which have already led to price rationing.
However, less canola available very likely won’t be enough to sustain further price hikes. The course the Canadian oilseed takes in the market will remain closely tied to the ebbs and flows of soyoil on the Chicago Board of Trade (CBOT). As stated before, where soyoil goes, canola is sure to follow.
There were suggestions that cracks were beginning to show in soyoil as well as Malaysian palm oil — that global vegetable oil supplies aren’t as lean as they had been. That could lead to sharp declines in veg oils, which would pull canola downward regardless of how little there is in Canada to be had.
As canola goes up and down, it remains quite clear volatility is still well embedded in the market. That was highlighted this week when ICE increased the regular daily limit of canola from $30 per tonne to $50.
There have been frequent instances of the exchange raising the limit from $30 to its next level of $45 per tonne. As well, the limit was further increased to $60 for trading on July 13. While at the end of the day, bids were up, those gains finished at less than half the limit. But during the overnight, they briefly hit $60.
futures | Supply concerns have already led to price rationing
