ICE Weekly: Trade talks, weather lifting canola prices
Multiple factors driving canola’s rally
| 2 min read
Photo: Greg Berg
Glacier FarmMedia — Trade talks between Canada and the United States as well as biofuel speculation gave canola prices a boost on the Intercontinental Exchange during the week ended July 2.
Despite canola markets being closed for Canada Day on July 1, the November canola contract sharply rose nearly C$20 per tonne to finish July 2 at $734.50, its highest level since June 23. Much of the boost came from the announcement of renewed negotiations between Canada and the U.S. on June 30 after a brief impasse.
David Derwin, a Winnipeg-based commodity futures advisor for Ventum Financial Corp., said trade discussions relate to new biofuel mandates in the U.S. and how much Canadian canola will be included.
“Once we knew there was going to be a larger volume (of renewable fuel blends) proposed, that’s helped oil futures, in general,” Derwin said. “If there’s (more) inclusion, that’s a positive and even if there’s not and soyoil is out of the picture for some uses, canola can fill some of those.”
Statistics Canada reduced its 2025-26 estimates for canola acres in its principal field crop report last week and Derwin added that tighter supplies are also underpinning gains. Dry weather in most parts of the Prairies has also been supportive.
“In some areas, the crops look really good; some have been terrible. We need a lot of rain,” he said.
Derwin added that the period between Canada Day and Independence Day in the U.S. often welcomes seasonal highs for canola, but the oilseed doesn’t seem to have reached its peak yet.
“For now, it’s pointing up, but these levels are providing really good opportunities for people,” he said.
Derwin also said weather can also affect prices, especially at this time of year, which could put an end to canola’s rally. However, setbacks in cross-border trade talks and canola’s inclusion in U.S. biofuel blends can also knock prices down.
“Those are the three factors pushing (prices) up and those are the three that can push them down too,” he said.
