Uncertainty continued to be the main driver in canola’s rally during the week ended Oct. 24. Be it questions about how much canola Canadian farmers harvested in 2024-25 or when China imposes some kind of punitive measures against canola, export demand has surged.
The Canadian Grain Commission’s latest grain movement report put canola exports to date for 2024-25 at 2.59 million tonnes, well over twice the amount shipped out during the same period last year. If exports were to continue on their current pace, they would exceed 12 million tonnes, far above the projected 7.5 million Agriculture and Agri-Food Canada projected in its October supply and demand report.
The problem is there likely wasn’t enough canola grown this year to meet export and domestic demand. In September, Statistics Canada forecast the crop at 18.98 million tonnes, but many in the trade believe it will come in below that with 18 million tonnes possible. Until StatCan issues its next production report in December, no one has a good bead as to how much was harvested.
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Hopes of a canola crop of upwards to 20 million tonnes this year were brutally dashed by a summer heat wave and dry conditions.
On a sidenote, the United States Department of Agriculture has remained quite stubborn or overly optimistic in its world oilseed report from Oct. 11, which pegged Canadian canola production at 20 million tonnes.
Then there’s China and its investigation into alleged canola dumping by Canada. Early last month the Chinese government was outraged when the Canada government said it would hike tariffs on Chinese-made electric vehicles by 100 per cent, plus significant increases to levies on steel and aluminum. In retaliation, China placed Canadian canola in its sights.
While the findings of the investigation are likely to be released sometime within the next 12 months, there’s been speculation China could impose some kind of preliminary measure. Exactly when China makes its move is unknown, but it will be when the country has acquired enough canola to get it through the turmoil that’s sure to happen when those measures are imposed.
Until then, canola will likely continue to gain strength, maybe with its January contract busting through the psychological support level of $670 per tonne.
