Canola market recovering entering April
31/03/2025 (Farm & Ranch Guide) - The canola market has attempted to find a bottom recently due to trade concerns, with the ICE futures canola contracts hitting lows recently. Many market analysts feel that the fundamentals of the canola market are being overweighed by other factors.
Agriculture & Agrifood Canada recently published its monthly updates and showed canola exports for 2025-26 increasing by 500,000 metric tons (MT) from its earlier estimates.
In its February report, it said canola crush is projected at a record-high 12 million metric tons (MMT) as the industry continues its efforts to expand capacity in order to support increased domestic demand. Carryout stocks were projected at a 13-year low of 1 MMT as record-high domestic use combines with lower production.
But then in its March report, it said canola crush is now projected to decline slightly to 11 MMT, on heightened policy uncertainty over proposed tariffs and renewable energy mandates. It said this reduced forecast is tentative and may decline further if proposed tariffs and trade disturbances actually materialize.
It also noted that this forecast could revert to last month’s estimates if policies stabilize, and plants operate at full capacity. Exports are forecast to fall to four-year lows, while carryout stocks are projected higher to 2 MMT, double the previous month’s estimates.
This analysis shows the extreme changes that can take place in the canola market supply and demand and point to continued volatility in prices.
Due to the recent sharp drop in canola prices, canola growers from a cross-section of the U.S. expressed to congressional offices during the U.S. Canola Association annual meeting in Washington, D.C. that the number one priority of the canola industry is trade assistance for canola growers in 2025 based on the impacts seen from tariffs and the perceived threat of tariffs. The economic impact to the U.S. canola industry is approximately $150 million. The industry will continue to provide detailed information to the USDA as it prepares for potential trade assistance to the agriculture industry.
Another top priority of the industry was a request to fix the carbon intensity score assigned to canola in the announced 45Z regulations. As of now, canola oil will not generate any credits under the proposed program. Fixing the calculations by ensuring the most recent, actual data is used and advocating for a complete removal of the Indirect Land Use (ILUC) provisions was explained to lawmakers and Ag Committee staff.
In the USDA Annual Oil Crops Yearbook, published recently, the canola oil consumption for biofuels forecast was lowered to 4.8 billion pounds for this year, down from a prior estimate of 5 billion pounds. Food use is forecast at 4.8 billion pounds. This is an increase of 10.6 percent for biofuels and 1.65 percent for food use from the prior year’s actual use. The
canola use for biofuels is triple what it was just a few years ago, but this consumption level is at risk from the recent guidance published on the 45Z regulations.
The May ICE canola futures finished on March 26 at CAD $588 per MT, up $10.70 on the day and up $15 in the last two weeks. The July ICE canola futures contract closed at $594 per MT, up $6.90 on the day and up $8 in the last two weeks.
Local cash prices on March 26 at nearby crush plants ranged from $17.95 to $18.59 for March and April deliveries, up $0.50 to $1.20 per hundredweight in the last two weeks. May and June canola prices ranged from $17.31 to $18.99, up $0.10 to $.65 per hundredweight in the last two weeks. There has been recent improvement in the local basis for some locations, but the increase has only slightly moderated the recent price drop.
North Dakota State University recently completed a Getting It Right in Canola Production Webinar, sponsored by the Northern Canola Growers Association. Replays of the presentation are available on northerncanola.com.