Trump tariffs and uncertainty over new crop pressure canola and canola markets

The EU rapeseed and Canadian canola markets remain uncertain about supply and demand in the second half of the MY 2024/25, leading to speculative price spikes in near-term futures. An increase in the soybean surplus in the short term will further increase the pressure on quotes.

May rapeseed futures on the Paris exchange rose 1.1% on Thursday, but fell 1.1% on Friday after Donald Trump’s controversial statements on the timing of tariffs on Canadian goods, but overall for the week they rose 0.5% to €532.75/t or $555/t (+3.3% in February) on the back of speculative fund buying. However, EU mills are operating at negative margins and oil sales are weak due to falling global oil prices.

August new crop rapeseed futures rose 2.6% to €498.5/t in February as the market expects EU rapeseed production to increase in 2025.

According to forecasts, the area sown with rapeseed in France will decrease, and in Eastern Europe it will increase, while in Germany it will increase to 1.1 million hectares, and in the UK it will be the smallest in the last 42 years.

During the week on the Winnipeg exchange, March canola futures fell by 5.5% to 635 CAD/t or $440/t (-0.8% for the month), May futures fell by 4.5% to 651 CAD/t, and November new crop canola futures fell by 3.9% to 642 CAD/t.

The decline in the Canadian dollar against the US dollar and the fall in canola prices have increased the spread between rapeseed and canola prices from $70–80/t to $115/t, which will contribute to increased canola supplies from Canada to the EU.

In Ukraine, rapeseed crops were slightly affected by frost, especially in fields without snow cover. Rainfall over the weekend improved moisture reserves ahead of warming and the resumption of vegetation.

The area sown with rapeseed for the 2025 harvest has decreased by 130 thousand hectares compared to the last season to 1.12 million hectares, so production will decrease from 3.75 to 3.2–3.5 million tons, which will support prices for rapeseed of the new harvest at a high level.

Purchase prices for rapeseed in Ukrainian ports remain at the level of 25,000–25,500 UAH/t or $530–535/t, while forward prices are $500/t.

This week, markets are expecting the introduction of reciprocal tariffs between the US and Canada, and a corresponding reaction in prices for canola in Canada and soybean oil in the US.

Tags: Ukraine, China, EU, prices, Canada, rapeseed, USA