The ICE Futures canola market dropped hard to start the month of May, seeing heavy bouts of long liquidation as profit-taking finally came forward to weigh on values.
However, with no change to underlying fundamentals, the selling quickly ran out of steam and the futures managed to regain much of their lost ground.
July canola dropped well below its 20-day moving average at one point, which was bearish from a chart standpoint. It managed to claw back above that level, with most technical indicators still pointed higher.
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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.
Whether the sell-off was a sign that the highs are in for the time being remains to be seen, but a sideways consolidating pattern over the next few weeks is a possibility — at least until the market has a better sense on the state of the 2022 crop.
While temperatures are finally starting to warm up in Manitoba, the cool and wet start to the spring will delay seeding into the middle of May or even later in flooded areas. Meanwhile, much of the western Prairies remain on the dry side. That should allow for timelier seeding, but also keeps concerns over a repeat of last year’s drought at the forefront.
Old-crop stocks are dwindling, with only 3.9 million tonnes of canola on hand as of March 31, 2022, according to a report from Statistics Canada. That compares with 7.8 million tonnes last year and the five-year average of 9.3 million.
Canola exports have been reduced to a trickle in order to ration supplies through the end of the crop year, with only 27,300 tonnes exported during the week ended May 1, according to a report from the Canadian Grain Commission. Year-to-date exports of 4.3 million tonnes are roughly half of what moved with three months remaining in the previous crop year. Domestic usage remains solid, but the seven million tonnes crushed through 39 weeks of the 2021-22 crop year are still down by about a million from the previous year.
In the U.S., a slow start to spring seeding has provided some underlying support for both soybeans and corn. Soybeans can go in the ground later than corn, so if corn seeding is pushed back too far there could be some acreage shifts.
The ongoing conflict in Ukraine and weather concerns in a number of wheat-growing regions of the world lent support to wheat futures to start the month. Extreme heat has cut into the production prospects in India, the world’s largest wheat grower. Meanwhile, persistent dryness in the southern U.S. has hurt the condition ratings for winter wheat there, while wet fields to the north and into the eastern Canadian Prairies have pushed back spring wheat seeding.
North America’s growing season is just getting underway, with weather conditions over the next few weeks likely to provide a major influence on the day-to-day movement in all the grain and oilseed markets.
