Canadian canola futures have been recovering lately amid rising export volumes
Canola futures have staged a strong recovery after an initial dip, combating concerns over Chinese tariffs and finding support in robust export demand and bullish technical signals. Despite early losses triggered by China’s new tariffs on Canadian canola oil and meal, prices rallied as the market absorbed strong shipment data and maintained a firm position above key moving averages.
Read More About Rapeseed Oil Production Cost Reports - Request Free Sample Copy in PDF
Canada’s canola exports remain resilient, with the Canadian Grain Commission reporting shipments of 170,800 tonnes in the week ending April 27. Cumulative exports for the 2024-25 marketing year have surged to 7.694 million tonnes. This is a significant jump from 4.546 million tonnes at the same time last year. This is suggestive of the strong demand from alternative markets, including the U.S., which has helped counterpoise China’s reduced imports.
However, external risks still persist for vegetable oil markets. Crude oil’s sharp declinehas weighed on vegetable oil markets, including canola, due to its role in biodiesel production. Meanwhile, a record soybean harvest in South America and China’s slowdown in U.S. soybean purchases could further pressure global oilseed prices. Additionally, favorable U.S. planting conditions have accelerated soybean sowing, raising expectations for higher future supplies.
Moreover, the biggest threat to canola’s rally remains the possibility of China extending tariffs to include canola seeds as this can disrupt trade flows and pricing. If implemented, such a policy could erase recent gains. While the market appears supported near current levels, the outlook will hinge on geopolitical developments, energy market trends, and crop progress in key producing regions.
