Glacier FarmMedia — ICE Futures canola contracts were trading within a sideways range heading into the end of the 2024/25 (Aug/Jul) marketing year, with expectations for a tight old crop carryout providing support amid uncertainty over new crop production.
“Canola carryout will be pretty tight,” said analyst Lawrence Klusa of Seges Marketing in Winnipeg. He noted that Statistics Canada already upped their call on 2024/25 production to account for the solid usage numbers over the marketing year but will likely need to make another revision to make the numbers work.
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The 2025/26 crop is still growing, with mixed production prospects. “Some areas look really good, but other areas haven’t had a lot of rain so production will be cut in those areas,” said Klusa.
Whatever the result, he expected the supply/demand balance sheet would remain tight through 2025/26 if exports continue at the current pace — which would be supportive for prices.
However, the canola export program is highly variable from year to year, depending greatly on Chinese demand. China has recently resumed buying canola from Australia after restricting imports in 2020 over phytosanitary concerns. Klusa said the increased competition from Australia could become a concern, depending on how much canola China buys from them.
Canada’s own trade situation with China is also still uncertain, while a looming trade deal with the United States could also influence the oilseed markets.
Klusa expected canola would likely remain rangebound, with the November contract watching for breaks to either side of C$700 per tonne.
“I don’t think the bears want to sell it down to hard at this time,” said Klusa, adding “we’ll need some fundamental input to spur prices in one direction or the other.”
