Canola and rapeseed prices fell 2.3% under pressure from forecast of increased harvest in Canada

Statistics Canada (StatCan) yesterday sharply increased its forecast for Canadian canola production in 2025, sending canola and rapeseed prices lower as analysts did not expect such a sharp increase in production estimates, especially amid shrinking acreage.

November canola futures on the Winnipeg exchange fell 2.3% yesterday to CAD 636/t or $ 462/t, having already lost 10.4% for the month amid the imposition of tariffs by China and uncertainty about demand from the biofuel industry from the United States, as well as an increase in the harvest forecast in Canada.

Following canola, November rapeseed futures in Paris also fell 2.3% yesterday to €465.5/t or $543/t (-4.5% month-on-month).

In a report on August 28, StatCan experts updated their 2025/26 crop production forecasts based on the latest yield estimates using satellite imagery and agro-climatic data. They forecast that Canadian canola production will increase by 3.6% from last year to 19.9 million tonnes, driven by a 5.7% increase in yield to 41.0 bushels/acre, offsetting a 2.0% decrease in plantings to 21.4 million acres.

Saskatchewan canola production in 2025 is expected to increase by 5.9% from last year to 11.1 million tonnes, driven by a 5.1% increase in yield to 40.3 bushels/acre, while the area planted will increase by 0.8% to 12.1 million acres.

Alberta canola production is expected to increase 2.8% to 5.8 million tonnes, driven by a 6.1% increase in yields to 41.5 bushels/acre, driven primarily by the central part of the province, which received adequate rainfall. At the same time, planted area will decrease 3.1% to 6.1 million acres.

In Manitoba, yields are expected to increase by 8.2% to 43.5 bushels/acre and the area planted is expected to decrease by 9.6% to 3.0 million acres, resulting in a harvest of 2.2% to 2.9 million tonnes.

Recall that in June, the forecast for canola plantings in Canada was reduced to 21.46 million acres, which is 2.5% lower than the 2024/25 MY and 1.2% lower than the 5-year average. At that time, the future harvest was estimated at 19.2 million tonnes compared to 17.8 million tonnes in 2024/25 MY.

It is worth noting that in August, the USDA estimated the canola harvest in Canada at 19.25 million tons, but analysts' estimates ranged from 19.2 to 20.3 million tons.

The increase in canola production forecasts in 2025 is not putting much pressure on rapeseed prices in Paris, as the sharp increase in canola processing in Canada continues to reduce export potential.

According to Oil World, in 2025/26 MY, Canada plans to increase canola processing capacity by approximately 2 million tons to 15 million tons compared to 7.36 million tons in 2014/15 MY.

In the last 11 months of the 2024/25 MY (September-July), Canada processed a record 11.4 million tonnes of canola, compared to 11 million tonnes in total in the 2023/24 MY, so we expect processing to exceed 12 million tonnes this season and grow to 13 million tonnes in the 2025/26 MY if the US increases biofuel production by 60%, as announced for 2026 and 2027.