Canola Hits 29-week High

Canola futures traded above CAD 690 per tonne, near the highest level since July 2025, amid stronger demand and elevated prices of soy oil. China announced that will drop main tariffs on Canadian canola, following an agreement made between The Canadian and Chinese governments during Prime Minister Mark Carney’s January visit. Canada expects China to lower tariffs on Canadian canola seed to 15% by March 1, a significant drop from the current tariff of 84%, though the final rate remains uncertain. Traders in China had already begun booking cargoes ahead of the change. In the meantime, Canadian biofuel rules and the proposed 45Z clean fuel tax credit favor North American feedstocks, boosting canola oil demand, while the India trade deal is shifting vegetable oil exports toward Canada. As a result of these developments, supply prospects for Canadian farmers have improved at a time when exportable supplies from Australia are tightening.

Canola increased to 693.50 CAD/T, the highest since August 2025. Over the past 4 weeks, Canola gained 7.16%, and in the last 12 months, it increased 7.95%.

Canola futures climbed past CAD 690 per tonne, reaching six month highs, 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.