Canadian canola prices support high processing levels

The increase in the forecast for canola acreage in Canada has not led to a decline in canola quotes as the Canadian market continues to shift from exports to domestic processing.

 

On the ICE exchange in Winnipeg, November canola futures fell 1.2% after the StatCan report, but recovered 0.3% yesterday to 737 CAD/t or $520/t on the back of higher-than-expected processing volumes in May.

 

According to Statistics Canada, Canadian canola processing in May was 1.04 million tonnes, down just 1.5% from April and a typical late-season decline. Last year, processing in May was down almost 10%.

 

It should be noted that the high level of processing is facilitated by active demand for canola oil both in the domestic market and from biofuel producers in the US. This is additionally facilitated by the increase in oil prices, which has improved processing margins and allowed plants to maintain high rates of operation.

 

Overall, in January-May 2026, canola processing in Canada increased by 11% compared to the same period last year to a record 5.2 million tonnes. Thus, active demand for canola oil and the development of the biofuel industry continue to maintain processing volumes in Canada at a high level, even despite the seasonal reduction.

 

Canola quotes in early June reached their highest level in the 2025/26 MY at 795 CAD/t amid delayed planting and cold weather, but now rains are helping crops develop, and only in some regions has excess precipitation led to flooding in the fields.

 

High Canadian canola prices will keep EU rapeseed prices from falling further, as EU countries will find it harder to find import volumes from both Canada and Ukraine in the new season, where domestic processing is also increasing and export potential is decreasing. In addition, the Australian rapeseed harvest in the new season will be significantly reduced due to El Niño.