ICE weekly: China, soy complex lift canola prices

Glacier FarmMedia — The March canola contract on the Intercontinental Exchange hit its highest level in two months on Feb. 4 and one trader said nearby canola could move higher in the coming weeks.

The March contract gained C$8.90 per tonne during the week ended Feb. 4 at C$659.10. During the Feb. 4 session, it reached a high of C$660, which was the highest price seen for the contract since Dec. 2, 2025. On the same day, United States President Donald Trump announced that China committed to purchase 20 million tonnes of soybeans this marketing year, supporting vegetable oil prices.

Tony Tryhuk, director of futures trading with RBC Dominion Securities in Winnipeg, said China’s agreement to reduce and eliminate tariffs on Canadian canola was already factored into prices despite the agreement not coming into effect until March 1.

“No doubt the lifting the trade restrictions (by) China had a very positive effect on values,” Tryhuk explained. “Even on a day like (Feb. 4), there was positive news coming out of the U.S.”

The move above C$650/tonne in the March contract was also supportive from a chart standpoint.

“There was some pretty good resistance around that C$650 area. We managed to break above that,” he added. “Anybody who was short, thinking those highs were going to remain in place because of the very burdensome carryout we’re still projecting this year, those people are now in a position to buy back those positions and cover them.”

March soybeans gained 17.25 cents per bushel at US$10.9225 during the week, while March soyoil rose 1.35 cents per pound at 55.66. Tryhuk said it was “baffling” to see the Chicago soy complex move higher despite the upcoming record South American soybean harvest.

“It’s counterintuitive to see our market being as strong as we are,” he said. “You can look to the energy market. Biodiesel offered potential there, being a driver. Crude oil was trading at US$58 (per barrel) and it’s now at US$65.”

As traders start to roll their March positions into May, Tryhuk thinks the next resistance level for March canola will be C$675/tonne.

“(There was) pretty good resistance there back in early November. It looks to me a target price if the U.S. market can continue to be supportive to canola values.

“We need that updraft in order to get that market higher because by the time this deal is signed with China, it’s very late in the marketing year. If they don’t reach a two million-tonne export projection … our carryout will still be substantial, in the four million-tonne range,” he said.