May canola settled at C$704.90 per tonne on April 8, falling out of the sideways trading range it had held for the previous three weeks.

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From a technical standpoint, May canola had been creating a coiling pattern over the past month, with the break lower opening up significant room to the downside, said analyst Mike Jubinville. Looking at a chart, the next support comes in at C$700 per tonne and then around C$680.

However, seasonal price trends at this time of year generally point higher, said Jubinville.

While old crop canola supplies remain more than sufficient to meet demand, he added that reduced fertilizer applications due to high costs could be supportive in the longer term.

With the bearish technical signals on one side and supportive seasonals on the other, “the markets will just trade the war,” added Western Producer markets desk analyst Bruce Burnett.

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On April 1, profit-taking took May canola down C$13.30/tonne to close at C$718.50. However, it has still remained between C$710 to C$740 since March 24.

Phil Speiss from RBC Dominion Securities in Winnipeg said while canola prices have been in a bullish trend line over the past few months, fundamentals are leaning bearish due to large stocks and high acreage expectations this year.

• For daily market updates, visit the Western Producer Markets Desk

A canola contract closing below its 20-day average in two straight sessions is an indicator of a downturn, he added.

“That’s step one. Get a close below the trend line,” Speiss said. “If you can get (two closes below), well now you start talking maybe there’s a potential downside. You look at targets from previous days. On (March 23), we saw a low of C$708.70/tonne and (the week) before that, we saw C$700.60. Those would become targets on the downside.”

Canola prices are largely tied to crude oil and especially to Chicago soyoil, but Speiss said diesel and heating oil markets are also influencing the oilseed.

“(Heating oil) is the most firm out of the energy markets,” he said. “There is a connection there on the bio side of things … If you look at a heating oil chart, it’s going straight up. If you’re playing biofuel and you’re a speculator or large managed money and you see that play, you’re just feeding into that canola length.”

Canola crush margins are also remarkably strong with the May contract at C$333.64/tonne as of March 31, more than double from a year earlier (C$165.31). However, Speiss noted that margins are sure to come down soon.

“It’s parabolic,” he said. “We know the crush pace is the crush pace. We know that they’re full through summer. At some point, it’s just a number. From a futures perspective, we see crush demand getting pushed further and further out the curve: November, January 2027, March 2027 … (Crush margins) don’t play too much of a role anymore.”

As for where canola prices could go in the near future, Speiss said they’re as uncertain as the war itself.

“We’re so tied to the geopoliticals right now, it’s an impossibility,” he said. “If you want to bet on anything, the trend just stays intact until you break it.”

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The May canola contract closed at a high of C$739.90 per tonne on March 13 and then pulled back to C$702.60 on March 16. It recouped most of its losses the following day, but slipped to C$726.20 on March 18.

Tryhuk said canola prices are “weakly correlated” with those of crude oil, they follow soyoil prices more strongly. The May soyoil contract in Chicago reached 67.44 cents per pound on March 13, but dropped limit down on March 16. Soyoil regained most of its decline the next day, but eased back to 65.53 cents/lb. on March 18.

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“(Soyoil) was really more influenced by Trump’s and China’s decision to push back on some of their anticipated meetings because of what’s happening in the Middle East,” he said. “Perhaps that selloff was a bit oversold. The meetings weren’t cancelled, just postponed.”

In addition to higher prices, Tryhuk thinks canola planting in 2026-27 is likely to exceed the 22-million-acre mark.

Statistics Canada projected 21.84 million acres of canola to be seeded this spring. However, data collection was completed before China’s reduced tariffs on Canadian canola exports and before the war started in the Middle East.

“If anybody had the potential for swing acres and they weren’t sure what to do, then without a doubt,” he said. “We were looking at prices in the lower end of the C$600 range leading up to the report collection and since then, (canola) swelled by over C$100. I’m sure this will inspire (more) acres and perhaps the seeded figure will come closer to what the trade estimated.”

Export demand underwhelming

Nevertheless, rising canola prices could also backfire. Export demand has not been as much as anticipated after China reduced its tariffs.

“Higher prices will put some demand out of reach … A lot of the activity we’re seeing is crusher demand but I don’t think we’re seeing a lot of export demand,” Tryhuk said. “The domestic crush industry is going to have to support the futures. As long as the crush margins remain as excellent as they are, we’re not going to be concerned about a collapse or erosion in values.”

He added that canola could see more demand outside Canada, depending on the United States 2026 and 2027 biofuel blends to be announced later this month. Meanwhile, the canola crush was 11.5 million tonnes last year and is on pace to match that this year. This could mean Canada’s canola crush capacity may have reached its upper limit.

As crude oil prices stay elevated, canola is likely to do so as well.

“I think it’s fair to say we’ve probably reached a new price band for canola and I wouldn’t expect us to return to the C$625 area this year,” Tryhuk said. “Yes, we’ll see a pullback in crude. Yes, we’ll see a similar pullback in canola … But the media is saying there won’t be a quick resolution to this conflict and as such canola should be supportive generally.”

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May canola settled at C$733.30 per tonne on March 11, having climbed by more than C$30 since the start of the war on Feb. 28.

The futures are “being dominated by what’s happening in the Middle East,” said Lawrence Klusa of Seges Markets in Winnipeg.

While an uptrend remains in place from a chart perspective, Klusa cautioned that picking a top under the current environment was difficult given the unpredictable geopolitics.

He expected the latest rally in canola could lead to some shift in seeding plans, and recommended farmers lock in some new crop pricing.

However, planted area could also change depending on fertilizer availability. Roughly a third of the world’s fertilizer trade passes through the Strait of Hormuz, and its closure has sent prices climbing higher. Farmers may have already pre-booked fertilizer, but Klusa questioned if everything will be delivered.

“It will be an interesting year,” said Klusa, adding that weather conditions through the growing season will also become more important in the months ahead.

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Wilton said the U.S. Environmental Protections Agency sent its recommendations and a decision on them has yet to come from the White House. He said it’s unclear at the moment how Canadian canola could play into that biodiesel mandate. If it’s included, then it’s a matter of volume and how much its tax credit will be.

The EPA proposed biomass-based diesel at 5.61 billion gallons, a jump of 67.5 per cent from 2025 levels.

“It’s a pile of demand that’s coming down the line,” Wilton said, noting that Chicago soyoil has already been on the rise for some time.

Still an upside

Even if the Trump administration excluded Canadian canola, Wilton stressed there will still be an upside for it.

“Burning beanoil in the fuel tank, canola is going to pick up demand on the food side,” he said.

Wilton said the impact from the White House on U.S. soybeans could mirror that of corn when ethanol production was increased.

“You’re ramping up biodiesel production, so you will need the feedstocks to do that,” he said.

StatCan planting projections

As for the Statistics Canada forecast on planted area in 2026/27, Wilton suggested the report likely won’t have much of an impact on the canola market the day it’s released.

The trade widely expects planted canola acres to increase from 21.62 million seeded in 2025/26. Some in the market pegged the number at 22.50 million acres, cautioning yields are likely to drop to normal levels in 2026/27.

“We’ll need every stitch of canola we can produce,” Wilton said.

Looking for stronger exports

He added, the Canadian Grain Commission should be soon showing increases in canola exports in its weekly reports. The destinations will be confirmed in the CGC’s monthly reports, with the trade looking for a major increase of canola to China.

In the meantime, with the latest Middle East war, Wilton said it’s difficult to see where the commodities will go “from minute to minute and hour by hour.”

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David Derwin, a commodities investment advisor for Ventum Financial in Winnipeg, said higher crude and soyoil prices, as well as new Canadian canola exports to China, lifted the value of the oilseed.

“You see a bit of a chain effect. Crude oil goes up, then bean oil goes up and then canola too,” Derwin said. “Soyoil’s been a part (of these rallies) but other factors have helped, as well.”

He also said the funds have also flipped canola’s net position from short to long amidst speculation of the United States biofuel mandate for 2026.

Although canola prices ended mixed on Feb. 25, signaling a potential end to its rally, Derwin said canola previously broke through resistance levels when the oilseed was C$10 to C$20 per tonne lower. He believes there is still upside to go for canola.

“Those resistance levels are not set in stone and they can fluctuate,” he said. “(Canola) probably added C$80 per tonne since the beginning of the year. That’s a good move in a short period of time. It’s still pointing higher and over the course of the ride that we’ve seen since the beginning of the year, there will be periods of time where it gives back C$10 to C$15 and would still be in a shorter-term uptrend.”

China’s reduction of tariffs on Canadian canola last month were supportive of prices, as well as domestic demand. Derwin said an elevator sale of canola on Feb. 20 was “one of the largest in at least 10 years.”

“There certainly is buying by the grain companies and by end users. Demand has been fairly strong and some of it has been the China factor,” he added.

Another element that could affect canola prices will be Statistics Canada’s principal field crop area report on March 5. The report will be StatCan’s first to show estimated acreage numbers for the 2026-27 crop year. However, the figures were determined by a survey conducted before China reduced its tariffs on Canadian canola, and that could result in canola acres being underestimated.

“There’s always the potential for some kind of surprise or some interesting numbers to come from (the report). I would think as we go forward here, a lot of the same factors that have been helping (canola) trend higher will still be very much in place,” Derwin said.

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Solid monthly crush data and optimism over U.S. biofuel policies accounted for some of the buying interest in soyoil, with some of that strength spilling into canola. While the U.S. soy complex has also benefited from talk of increased sales to China, the canola market lacked any supportive fundamental news of its own.

The May contract held just below resistance at C$680 per tonne for most of the week but managed to break higher on Feb. 18.

Speculative fund traders have been exiting their net short position in canola since the start of 2026 and were holding relatively equal long and short positions in the latest Commitments of Traders data as of Feb. 10. Analyst Mike Jubinville expected speculators were no longer bearish the canola market and would be buyers on any breaks lower.

Buyers and sellers appeared balanced at the C$680 per tonne level in the May contract for most of the week, said Jubinville. However, he expected values would eventually go up if soyoil keeps moving higher.

While C$700 per tonne could provide some nearby psychological resistance, Jubinville placed the next upside target on a weekly chart at the June high of C$740 per tonne.

May canola settled at C$682.70 per tonne on Feb. 18, it’s highest level in six months. The May soyoil futures in Chicago hit contract highs, settling at 59.08 U.S. cents per pound.

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“Canola has defied logic, marking up from $620 to $670 (per tonne),” said Tony Tryhuk, director of futures trading for RBC Dominion Securities in Winnipeg. “The Chinese news was supportive, but we’re choking off their interest.”

Tryhuk said canola made excellent gains after Canada and China reached their deal on tariffs, which will lower China’s tariffs on its imports of Canadian canola seed and oil to 15 per cent effective March 1. But the May canola contract ran into resistance and he said there wasn’t any follow through.

He stressed that if canola gets too expensive that China might not buy the two million tonnes of canola Agriculture and Agri-Food Canada has projected in its supply and demand estimates. He said that exports to Japan, Mexico and Canada’s other top canola customers won’t make up for any reduced purchases by China.

Tryhuk added the canola carryout already looks “sloppy” and said for real progress to be made China needs to buy more than two million tonnes of canola.

Helping to keep canola prices from getting too high is the lack of support to push the oilseed above its resistance. For the most-traded May contract, Tryhuk placed resistance at C$680/tonne.

“We would need something exceptional to happen,” he said.

Tryhuk there could be some support coming from any further gains in Chicago soyoil, especially if it increases well above 60 cents per pound.

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March canola settled at C$650.20 per tonne on Jan. 28, having risen by about C$50 per tonne off its December lows.

“Ten to 20 dollars higher wouldn’t be out of the question,” said David Derwin, commodities investment advisor with Ventum Financial in Winnipeg. He placed the next upside targets for the March contract at C$660 and then again at C$670 per tonne.

Derwin said China’s return to the market for Canadian canola ahead of reduced tariffs in March was supportive, with spillover from gains in soyoil futures in the United States also underpinning canola values. Seasonal price trends may also contribute to additional gains in canola, but Derwin said any movement above the nearby resistance points would take an outside catalyst.

Those outside forces could also easily send prices lower, with wider geopolitical developments, tariffs and developments in U.S. biofuel policy all potential market-moving influences.

“For now, it’s pointing higher and there’s a little more room here,” said Derwin on canola.

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Canola yields

Klassen said canola yields could go back to normal in 2026/27, slipping from the 2.51 tonnes per hectare they harvested in the fall. The two previous crop years, Canadian farmers gleaned about 2.20 t/ha., according to Agriculture and Agri-Food Canada.

On Jan. 21, AAFC issued it January supply and demand estimates, projecting the 2026/27 canola yield at 2.17 t/ha.

Cost of production

Klassen looked at the cost of production and surmised farmers would need at least C$661 per tonne for new crop just to break even.

“Prices for new crop are below that right now. The market needs to move higher so that farmers maintain the acres from last year,” Klassen said.

AAFC estimated planted area for 2025/26 at 8.75 million hectares, compared to an average of nearly 8.30 million over the last two years.

As for the current situation, Klassen said farmers have been very reluctant to sell their canola because C$617/tonne is below the cost of production.

Farmers deliverling less canola

The Canadian Grain Commission reported producer deliveries of canola for the week ended Jan. 11 at 8.15 million tonnes, down from 9.25 million a year ago.

“You another need (C$44 per tonne) before the farmer opens his bins to give it to the commercials,” he said.

Canada-China deal

Meanwhile, canola was being pushed higher on continued optimism toward the Canada-China deal signed on Jan. 16, Klassen said.

The agreement is to drop China’s tariffs on imports of Canadian canola seed and meal from 100 to 15 per cent. In exchange, Canada will slash its surcharge on Chinese electric vehicles from 100 to 6.1 per cent. However, China’s levies on canola oil are to remain at 100 per cent.

Klassen said there’s the belief within the trade that China will import about two million tonnes of canola before the 2025/26 marketing year ends on July 31.

“Next year, they’ll probably take their usual amount of four million tonnes,” he added.

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