Canola Tests 6-Month Highs

Canola futures climbed toward CAD 680 per tonne, revisiting six month highs last seen on February 12, amid policy driven demand and tightening supply expectations. On the demand side, proposed 45Z clean fuel tax credit rules and Canadian biofuel regulations increasingly favour North American feedstocks, reinforcing demand for canola oil, while the trade agreement with India and indications of extended Chinese purchases have redirected vegetable oil flows toward Canadian exports. The USDA also lifted global oilseed trade projections, including an additional 400,000 metric tons of Canadian canola bound for China, and signalled firmer soybean oil exports, further underpinning the oilseed complex. On the supply side, although December stocks in Canada were higher year over year, exportable supplies from Australia are easing and acreage growth in Canada is expected to be limited, while AAFC projects 2026 to 2027 ending stocks to fall by nearly 1 million metric tons.

Canola futures held above CAD 670 per tonne, close to six month highs seen February 12th, as the reopening of trade between Canada and China tightened the export balance just as vegetable oil demand improves. Chinese buyers have booked sizable Canadian volumes for shipment through early spring, and Beijing is set to lower tariffs to about 15% from March 1st, restoring a key outlet that had curtailed flows and left exporters reliant on secondary markets. With Canadian exports previously running below the pace needed to meet the 8.2 million tonne annual target, any pickup in shipments quickly reduces available supplies. At the same time, global oilseed data show larger soybean output but comparatively tighter rapeseed and oil stocks, so stronger crush and biofuel driven demand for veg oils supports canola oil values. Although Australian supply has returned to China, volumes remain limited, leaving Canadian cargoes central to balancing near term demand and keeping prices elevated.

Canola increased to 666.40 CAD/T, the highest since August 2025. Over the past 4 weeks, Canola gained 7.24%, and in the last 12 months, it increased 0.3%.