Hefty U.S. soybean crush propels Canadian canola upward

Despite rising with soy, traders say canola is still too cheap

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Published: August 24, 2023

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Hefty U.S. soybean crush propels Canadian canola upward

The aggressive use of soybeans in the United States for biofuel production was squarely behind the sharp upticks in canola prices for the week ended Aug. 17 on the Intercontinental Exchange.

The U.S. National Oilseed Processors Association released its monthly report on Aug. 15, showing 173.3 million bushels of soybeans were crushed in July. Not only did the amount well exceed market expectations, but it also set a new monthly crush record. As well, a strong drawdown on the country’s soyoil stocks added to the rally in soyoil on the Chicago Board of Trade, with the market contending with tightness.

Over the week ended Aug 17, the September soyoil contract added 3.58 cents, closing that Thursday at 67.76 U.S. cents per pound. While not the 70-plus cents per pound seen earlier this year, the current prices have been some of the best over the last several weeks.

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Western Producer Markets Desk analyst Bruce Burnett inspects a canola plot at Ag In Motion 2025. PHOTO: SEAN PRATT

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 spillover from soyoil and soybeans bolstered canola’s fortunes after seeing tough times recently. During that same week, the ICE November contract climbed from a low of $761.90 per tonne on Aug. 15 up to $795.20 on Aug. 17. That contract had surpassed the psychological level of $800/tonne, but a slip in global crude oil prices took away just enough strength to finish below that.

A trader stressed that canola needs to become more expensive relative to other vegetable oils. Even with the Canadian oilseed around $800 mark, he said it’s still cheap compared to soyoil. There has been little strength in canola itself, which needs to ride the coattails of soyoil to climb its way higher. And as so often the case, movements in canola lag those in Chicago.

While only two weeks into the 2023/24 marketing year, canola has been off to a good start. Exports from last year’s snail’s pace of 11,300 tonnes are closing in on 220,000. Domestic usage has improved as well, from 392,300 tonnes a year ago to 409,400.

The big question is how much canola Canadian farmers will harvest this year. Trade guesses run the gamut from as little as 16 million tonnes to more than 19 million once the combines have finished making their rounds.

The July supply and demand report from Agriculture and Agri-Food Canada forecasts production at 18.8 million tonnes. However, by the end of the month we will have a much better bead on canola production when Statistics Canada issues its first estimate.

The hot and dry conditions that plagued the Canadian Prairies this spring and summer gave impetus to downgrade production estimates, but with the region’s harvest in its early stages, yields for other crops have not been a bad as initially thought. Only the earliest-planted canola has been harvested so far, but as more comes off the fields, anecdotal evidence and provincial crop reports will also provide a better grasp of how much canola there will be.

About the author

Glen Hallick - MarketsFarm

Glen Hallick - MarketsFarm

Reporter

Glen Hallick grew up in rural Manitoba near Starbuck, where his family farmed. Glen has a degree in political studies from the University of Manitoba and studied creative communications at Red River College. Before joining Glacier FarmMedia, Glen was an award-winning reporter and editor with several community newspapers and group editor for the Interlake Publishing Group. Glen is an avid history buff and enjoys following politics.

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