With an increase of nearly $11 during the week ended Nov. 18, the January canola contract broke through and remained above its psychological resistance level of $650 per tonne. Given the pressures canola futures on the Intercontinental Exchange have been facing, the move was a somewhat unexpected welcome.
There’s little doubt among market participants that this year’s canola harvest exceeded the 20.03 million tonnes Statistics Canada estimated in September. We’ll get a good idea as to how much canola came off the fields come Dec. 4, when StatCan issues its next production report.
Nevertheless, there’s a lot of canola to be had across the Prairies. But without China buying canola from Canada, the impetus for farmers to sell it simply isn’t there. Not long ago the idea was for growers to get rid their canola on the idea a trade deal between Canada and China won’t come in 2025. That an agreement between Ottawa and Beijing is more likely to be reached sometime in 2026.
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However, even without China there’s still sufficient demand for canola that the commercial buyers are wanting it, so prices have climbed.
Although the Canadian government said recently there was some progress in trade talks with China, there’s been nothing more on that front. In turn, those stiff tariffs China imposed on Canadian canola seed, oil and meal imports will continue to loom over the market until some deal is reached.
Canadian Grain Commission data shows 4.87 million tonnes have been delivered by farmers so far in 2025/26, 1.12 million tonnes less of the oilseed than they did a year ago. That decline is now underpinning demand, as the commercials are trying to entice reluctant sellers.
Just where do canola futures go in the weeks to come? That remains in the air. Rallies always come to an end; it’s just a matter of having an idea as to when.
Canola could go higher, but likely fresh news will be needed to give the trade something more to bite on. Should the market fall back, then canola could stay rangebound with the January contract finding support at $600/tonne.
