Canola market finds upside as U.S.-Canada trade talks restart

The resumption of trade talks between Canada and the United States provided a jolt to canola prices on the ICE Futures exchange on June 30.

When Canada rescinded its planned digital services tax on June 29, the brief impasse between the two countries was lifted, and canola prices for the oilseed were approximately $40 per tonne higher when trading ended on July 2. However, $15 of those gains were given back the next day in a market correction.

The negotiations were thought to be good news for canola producers looking to be included in new U.S. biofuel mandates despite speculation that foreign biofuels and feedstocks would only receive half the credits compared to domestic sources. Those mandates were to be included in U.S. President Donald Trump’s so-called ‘Big Beautiful Bill’ that was signed into law on July 4.

Keeping the lines of communication open should be positive for canola, but there were other factors underpinning its gains.

Statistics Canada estimated 2025-26 canola area at 21.5 million acres on June 27. That was down slightly from the March report and compares with the 22.0 million acres seeded the previous year. While the planted area was in line with trade expectations, StatCan also announced revisions to 2024-25 production, raising its call on the size of the crop to 19.2 million tonnes from an earlier estimate of 17.8 million. While the larger old crop was somewhat bearish, attention has largely turned to the new crop and higher-than-normal temperatures in some areas lent additional support to prices.

August Chicago soyoil was stronger on the week, as was Malaysian palm oil as Indian imports hit an 11-month high in June at 953,000 tonnes.

However, just as canola’s sharp rise brought optimism, its July 3 setback can be cause for concern.

Downturns in Chicago soyoil and European rapeseed pressured November canola on July 3 and closing just above the 20-day moving average has many wondering if that support level will hold. Not helping canola’s cause is a large net-long position by the funds, the possibility of China closing its doors to Canadian canola seed and a Canadian dollar approaching the 74 U.S. cent mark for the first time since last October.

At the midway point of the calendar year, there is no shortage of pivot points ahead to dictate where canola prices end up this summer.

Tags: canola, prices, United States, Canada, Production, area, trade talks