There is likely nothing substantial over the next few months that could break canola and other vegetable oils out of their rangebound state.
Canola, for instance, continued to vacillate between $800 and $850 per tonne during the week ended Feb. 2. In recent weeks the Canadian oilseed has pushed towards $900/tonne, its upper level of resistance.
While other vegetable oils such as European rapeseed and Malaysian palm oil made their moves up and down, such wasn’t enough to see them or canola take off in a given direction.
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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.
Spreaders simply aren’t interested at this time to push or pull canola to any great extent. They’re content with making profits with a few moves one way, followed by a few moves the other way.
Looking toward the horizon, there’s not much sway the oilseed trade out of that malaise — albeit a malaise that offers pretty good canola pricing.
On Feb. 7, Statistics Canada issued its stocks report, with trade expectations pointing to canola stocks as of Dec. 31 at 11.7 million tonnes, about a third more than the previous year. As well, wheat stocks are projected to be 22.3 million tonnes, also about a third more than a year ago. The increased stocks will show what’s already well-known — that production in 2022-23 recovered from the previous year’s drought.
On Feb. 8, the U.S. Department of Agriculture published its monthly supply and demand estimates. As with StatCan, the market isn’t expecting any big changes in the USDA report.
Essentially, canola is likely to remain rangebound for the next few months. Once a better picture is formed as to what this spring’s planting could be like, canola probably will remain between $800-$900 per tonne.
Some in the trade point to Argentina, where a severe drought has ravaged its soybean and corn crops. True, Argentina’s production will be down significantly, but in the larger scheme of things, total South American production will be up, thanks to record output from Brazil. Numerous organizations and consultancies point towards the Brazil soybean harvest exceeding 150 million tonnes, which would well compensate for the sharp declines in its southern neighbour.
It can also be said that current supplies of oilseeds are rather tight at this time. However, it won’t be long for that massive South American harvest to hit the market — and that has some in the U.S. concerned that sales to China, the great importer of pretty much everything agricultural, will switch to buying from Brazil. A bearish factor to keep in mind.
