Canada completes canola planting season, but prices rise amid lack of rainfall

As of early June, Canada had almost completed the canola planting campaign, but a lack of rainfall in key regions forced traders to increase their futures purchases, which caused canola quotes to increase by 3.3–3.9% for the week .

 

Current crop status in Canada:

• Saskatchewan : 97% of the area planted (5-year average: 95%). Crop condition: 7% excellent, 50% good, 35% fair. 15-20 mm of precipitation is expected by the end of the week.
• Alberta : 98.9% of the area sown.
• Manitoba : 90% of canola acreage is already planted, with 2–5 mm of precipitation forecast.

Quote dynamics:

• July futures : +3.3% — to 710 CAD/t (≈518 $/t), unchanged for the month.
• November futures (new crop): +3.9% to 694 CAD/t (+2.7% per month).

Pressure on prices also persists due to the decrease in processing margins : over the last month it has fallen from $94/t to $64/t (for comparison, $148/t last year), which reduces the interest of processors.

 

Speculative interest

As of May 27, speculators' net long positions in the rapeseed futures market reached a record level of over 100,000 contracts .

 

Biofuel factor in the USA

Prices are also supported by information about a possible decision by the US EPA regarding the target volume of biodiesel blending in 2026 - 4.65 billion gallons , which, although less than the proposal of the relevant associations (5.25 billion), is significantly higher than the figure for 2025 (3.35 billion).

 

Exports and exchange rates

• Canada has already exported 8.53 million tonnes of canola (from August 1 to June 1), exceeding the USDA forecast (8.5 million tonnes), despite the slowdown.
• The strengthening of the Canadian dollar and rising prices have led to a reduction in the difference between Canadian canola and European rapeseed to $41/t (previously up to $140/t), which stimulates exports to the EU.

 

European market

• August rapeseed futures in Paris increased by 3.6% to €490.5/t (≈$559/t), +4% for the month.
• The growth occurred despite improving weather conditions in Northern Europe, but was synchronized with canola dynamics.

 

Situation in Ukraine

• May precipitation and moderate temperatures in June improved the condition of rapeseed crops.
• However, the harvest is expected to be lower than last year, so demand prices for July deliveries to the Black Sea are holding at $500–515/t .

 

Australia: supply reduction

According to Oil World, canola exports from Australia fell to 563,000 tonnes in April (down from 904,000 tonnes in March and 648,000 tonnes in April 2024), including 498,000 tonnes to the EU .

ABARES analysts predict that Australia’s canola area will fall to 3.4 million hectares in 2025/26, the lowest level in four years. If there is insufficient rainfall in the near future, this will limit production potential .