Canola Hits 31-month High

Canola increased to 758.80 CAD/T, the highest since September 2023. Over the past 4 weeks, Canola gained 4.25%, and in the last 12 months, it increased 11.76%.

Canola futures rose toward $740 per tonne, the highest since mid-March, tracking gains in soybean oil and higher oil prices amid lingering disruptions in the Strait of Hormuz and uncertainty around the Middle East peace deal. On the production side, Western Canada is slowly thawing and drying after a very late spring delayed canola seeding, but farmers say there is still time to plant without affecting production. Meanwhile, a USDA report released early this month indicated canola production in Australia is projected to fall to 6.2M tonnes in 2026/27, a 19% decline from the previous year’s near-record 7.68M tonnes, dampened by diesel and nitrogenous fertiliser supply constraints and price increases.

Canola futures rose past $720 per tonne as renewed skepticism regarding a Middle East ceasefire re-established the risk premium across the energy and oilseed complex. This upward move followed a surge in crude oil which strengthened the biofuel-driven demand floor and pulled Chicago soyoil and canola higher in tandem. While President Trump extended the deadline for strikes on Iranian energy infrastructure to April 6th to allow for negotiations, the potential deployment of 10,000 additional US ground troops has fueled fears of a prolonged conflict and further supply chain disruptions. Farmers face increasing pressure as global supplies of nitrogen-based fertilizers shrink and diesel overheads climb, threatening to offset the gains from higher crop prices. Despite a temporary gesture of goodwill where Iran allowed ten tankers to pass through the Strait of Hormuz, the waterway remains effectively closed, keeping energy-driven inflation risks at the forefront of the market.