On April 1, profit-taking took May canola down C$13.30/tonne to close at C$718.50. However, it has still remained between C$710 to C$740 since March 24.

Phil Speiss from RBC Dominion Securities in Winnipeg said while canola prices have been in a bullish trend line over the past few months, fundamentals are leaning bearish due to large stocks and high acreage expectations this year.

• For daily market updates, visit the Western Producer Markets Desk

A canola contract closing below its 20-day average in two straight sessions is an indicator of a downturn, he added.

“That’s step one. Get a close below the trend line,” Speiss said. “If you can get (two closes below), well now you start talking maybe there’s a potential downside. You look at targets from previous days. On (March 23), we saw a low of C$708.70/tonne and (the week) before that, we saw C$700.60. Those would become targets on the downside.”

Canola prices are largely tied to crude oil and especially to Chicago soyoil, but Speiss said diesel and heating oil markets are also influencing the oilseed.

“(Heating oil) is the most firm out of the energy markets,” he said. “There is a connection there on the bio side of things … If you look at a heating oil chart, it’s going straight up. If you’re playing biofuel and you’re a speculator or large managed money and you see that play, you’re just feeding into that canola length.”

Canola crush margins are also remarkably strong with the May contract at C$333.64/tonne as of March 31, more than double from a year earlier (C$165.31). However, Speiss noted that margins are sure to come down soon.

“It’s parabolic,” he said. “We know the crush pace is the crush pace. We know that they’re full through summer. At some point, it’s just a number. From a futures perspective, we see crush demand getting pushed further and further out the curve: November, January 2027, March 2027 … (Crush margins) don’t play too much of a role anymore.”

As for where canola prices could go in the near future, Speiss said they’re as uncertain as the war itself.

“We’re so tied to the geopoliticals right now, it’s an impossibility,” he said. “If you want to bet on anything, the trend just stays intact until you break it.”

The post ICE Weekly: Trade waits for canola to break out appeared first on Grainews.

“Crude oil is going to be a big driver in this environment and therefore (soyoil), but there’s a lot of political stuff too,” Derwin said.

Along with the Middle East war, Derwin pointed to coming renewable fuel and biodiesel policies in the United States and the renegotiating of the Canada-U.S.-Mexico agreement.

U.S. President Donald Trump is scheduled on March 27 to announce the latest renewable fuel proposals coming from the Environmental Protection Agency. Meanwhile the review process for CUSMA is already underway.

Derwin said it’s important to protect oneself from possible wide swings in canola, which could range from C$600 to C$800 per tonne.

“It’s more of what happens if it goes to either one of those places,” Derwin said. “You don’t want to lock in too much in case of production concerns. There’s some big swing potential here.”

Added to that is the forthcoming canola crop.

“We’re a little bit early where any kind of seeding concerns or weather-driven concerns come into play,” he said, emphasizing that could change in the coming weeks and months.

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The May canola contract closed at a high of C$739.90 per tonne on March 13 and then pulled back to C$702.60 on March 16. It recouped most of its losses the following day, but slipped to C$726.20 on March 18.

Tryhuk said canola prices are “weakly correlated” with those of crude oil, they follow soyoil prices more strongly. The May soyoil contract in Chicago reached 67.44 cents per pound on March 13, but dropped limit down on March 16. Soyoil regained most of its decline the next day, but eased back to 65.53 cents/lb. on March 18.

For daily market updates, visit the Western Producer Markets Desk

“(Soyoil) was really more influenced by Trump’s and China’s decision to push back on some of their anticipated meetings because of what’s happening in the Middle East,” he said. “Perhaps that selloff was a bit oversold. The meetings weren’t cancelled, just postponed.”

In addition to higher prices, Tryhuk thinks canola planting in 2026-27 is likely to exceed the 22-million-acre mark.

Statistics Canada projected 21.84 million acres of canola to be seeded this spring. However, data collection was completed before China’s reduced tariffs on Canadian canola exports and before the war started in the Middle East.

“If anybody had the potential for swing acres and they weren’t sure what to do, then without a doubt,” he said. “We were looking at prices in the lower end of the C$600 range leading up to the report collection and since then, (canola) swelled by over C$100. I’m sure this will inspire (more) acres and perhaps the seeded figure will come closer to what the trade estimated.”

Export demand underwhelming

Nevertheless, rising canola prices could also backfire. Export demand has not been as much as anticipated after China reduced its tariffs.

“Higher prices will put some demand out of reach … A lot of the activity we’re seeing is crusher demand but I don’t think we’re seeing a lot of export demand,” Tryhuk said. “The domestic crush industry is going to have to support the futures. As long as the crush margins remain as excellent as they are, we’re not going to be concerned about a collapse or erosion in values.”

He added that canola could see more demand outside Canada, depending on the United States 2026 and 2027 biofuel blends to be announced later this month. Meanwhile, the canola crush was 11.5 million tonnes last year and is on pace to match that this year. This could mean Canada’s canola crush capacity may have reached its upper limit.

As crude oil prices stay elevated, canola is likely to do so as well.

“I think it’s fair to say we’ve probably reached a new price band for canola and I wouldn’t expect us to return to the C$625 area this year,” Tryhuk said. “Yes, we’ll see a pullback in crude. Yes, we’ll see a similar pullback in canola … But the media is saying there won’t be a quick resolution to this conflict and as such canola should be supportive generally.”

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Terry Reilly, an independent analyst, said soyoil on the Chicago Board of Trade is the commodity most closely following the lead of crude oil, with the latter almost touching US$120 per barrel earlier this week. The May soyoil contract closed at 67.16 U.S. cents per pound on March 11, up 3.57 cents or 5.6 per cent from the week before.

While corn, soybean and wheat prices won’t be as closely tied to crude oil as soyoil, Reilly said their movement will still be determined elsewhere.

“The outside markets will continue to drive the markets for at least until when the conflict starts to wind down,” he added. “Fertilizer is going to be heavily impacted and it will drive up the costs for farmers across the globe. It’s shifting some ideas and we could see less acres go into the ground this spring across North America.”

There was also speculation the United States Environmental Protection Agency may submit its 2026 renewal fuel standard later this week, which could increase the need for corn (ethanol) and soybeans (biodiesel). However, Reilly doesn’t anticipate any increased demand.

“Currently, the prices of some of the feed stocks like canola oil going to California or (used cooking oil) and tallow, their prices are at a discount to soybean oil,” he explained. “I don’t see any greater demand for alternative fuel sources, but no doubt we’ll probably be blending as much ethanol as we can.”

Reilly added he was surprised to see the U.S. Department of Agriculture trim projected soyoil use for biofuel by 800 million pounds at 14 billion in its monthly supply/demand estimates released on March 10. But there were little changes to projected U.S. corn, soybean and wheat stocks. While Reilly thought corn and soybean exports were “on the low side”, he believes the trade is more focused on new crop plantings.

“We still have several months to go until the end of the regular crop year,” Reilly said. “But either way, U.S. soybean stocks are expected to be pretty tight at the end of the season as China continues to buy U.S. beans.”

The war in Iran will continue to leave the trade guessing and keep prices higher, Reilly stated, adding that some analysts believe crude oil could surpass US$150/barrel. However, prices should stabilize once the war ends.

“I think after things start to cool down a little bit, I’d look for prices to get lower,” he said.

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Corn

• Projected 2025-26 ending stocks for U.S. corn were unchanged at 2.127 billion bushels, down nine million from the average trade estimate, but well above the 1.551 billion reported for 2024-25.
• Corn production and exports were also unchanged from February at 17.021 billion and 3.3 billion bushels, respectively.
• Global corn carryout was projected at 292.75 million tonnes, up 4.77 million from February, due to increased production and an upward revision to the 2024-25 carryout, which stands at 295.82 million.

Soybeans

• The 2025-26 soybean ending stocks estimate stayed put at 350 million bushels from last month, up six million from the average trade estimate and up 25 million from the 2024-25 figure.
• Production and exports remained the same at 4.262 billion and 1.575 billion bushels, respectively.
• Projected U.S. soyoil carryout was up 30 million pounds at 1.782 billion, while soymeal carryout was unchanged at 450 million short tons.
• The global soybean carryout estimate was trimmed by 200,000 tonnes at 125.31 million, which is 1.47 million above the upwardly revised 2024-25 carryout. Production was down one million tonnes at 427.18 million. Global soymeal carryout was down 180,000 tonnes at 19.33 million, while global soyoil carryout was up 70,000 tonnes at 6.20 million.

Wheat

• Projected U.S. wheat carryout for 2025-26 was unchanged from the previous month at 931 million bushels, up five million from the average trade estimate. Last year’s ending stocks totalled 855 million.
• Production and exports also remained the same at 1.985 billion and 900 million bushels, respectively.
• The global wheat carryout estimate was cut by 550,000 tonnes at 276.96 million despite increased production.

South America

• The USDA lifted its projected 2025-26 Brazilian corn production by one million tonnes at 132 million with ending stocks up 2.28 million tonnes at 5.96 million. In Argentina, production was down one million tonnes at 52 million with ending stocks down 800,000 tonnes at 5.09 million. Brazilian and Argentine corn production in 2024-25 were 136 million and 50 million tonnes, respectively.
• The projected Brazilian soybean crop was unchanged at 180 million tonnes with carryout also steady at 37.91 million. In Argentina, soybean production was cut by 500,000 tonnes at 48 million with ending stocks unchanged at 22.92 million. In 2024-25, Brazil and Argentina produced 171.5 million and 51.11 million tonnes of soybeans, respectively.

Grain, soy futures hit highs on war worries

Prices for fertilizer and fuel spiked as the war has closed the Strait of Hormuz, shut down fertilizer plants in the Middle East and upset shipping routes. The disruptions have left some farmers in the Northern Hemisphere ​scrambling for supplies just as they prepare to put seeds in the ground.

U.S. grain and soy futures touched multi-month highs on Monday, despite expectations for ample supplies, as traders worried the war would drag on and oil prices rallied. Traders also assessed the potential for U.S. farmers to cut back on plantings of corn because it requires high rates of nitrogen fertilizer.

USDA did not adjust any of its estimates in a monthly supply and demand report based on the Middle East conflict, said Mark Jekanowski, chairman of USDA’s World Agricultural Outlook Board.

“It’s way too early,” he said.

-With files from Tom Polansek/Reuters

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David Derwin, a commodities investment advisor for Ventum Financial in Winnipeg, said higher crude and soyoil prices, as well as new Canadian canola exports to China, lifted the value of the oilseed.

“You see a bit of a chain effect. Crude oil goes up, then bean oil goes up and then canola too,” Derwin said. “Soyoil’s been a part (of these rallies) but other factors have helped, as well.”

He also said the funds have also flipped canola’s net position from short to long amidst speculation of the United States biofuel mandate for 2026.

Although canola prices ended mixed on Feb. 25, signaling a potential end to its rally, Derwin said canola previously broke through resistance levels when the oilseed was C$10 to C$20 per tonne lower. He believes there is still upside to go for canola.

“Those resistance levels are not set in stone and they can fluctuate,” he said. “(Canola) probably added C$80 per tonne since the beginning of the year. That’s a good move in a short period of time. It’s still pointing higher and over the course of the ride that we’ve seen since the beginning of the year, there will be periods of time where it gives back C$10 to C$15 and would still be in a shorter-term uptrend.”

China’s reduction of tariffs on Canadian canola last month were supportive of prices, as well as domestic demand. Derwin said an elevator sale of canola on Feb. 20 was “one of the largest in at least 10 years.”

“There certainly is buying by the grain companies and by end users. Demand has been fairly strong and some of it has been the China factor,” he added.

Another element that could affect canola prices will be Statistics Canada’s principal field crop area report on March 5. The report will be StatCan’s first to show estimated acreage numbers for the 2026-27 crop year. However, the figures were determined by a survey conducted before China reduced its tariffs on Canadian canola, and that could result in canola acres being underestimated.

“There’s always the potential for some kind of surprise or some interesting numbers to come from (the report). I would think as we go forward here, a lot of the same factors that have been helping (canola) trend higher will still be very much in place,” Derwin said.

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Scott Capinegro, hedging specialist for AgMarket.net, said May corn was approaching a February low but is setting itself up for a March rally. As for wheat, he said funds were short and technicals were conducive for rallies the past week.

Soybeans’ rise can be attributed to rallying soyoil, of which the May contract had a weekly gain of 1.58 cents per pound. But the White House is expected to announce its biodiesel fuel blend in the coming days.

“That one could end up being ‘buy the rumour, sell the fact,’” he said. “We’re racing to meet a self-imposed deadline by the end of March. We’ve already put that rally into the market.”

Exports also should be giving support to corn and soybeans, said Capinegro.

“The corn exports continue to be good, but the corn market does act sloppy. We are breaking to the lower end of the range (in March corn). As for soybeans, it’s China, China, China,” he said, adding that the U.S. is waiting for Lunar New Year celebrations to end before shipping more beans to China.

The United States Department of Agriculture will host its 2026 Agricultural Outlook Forum from Feb. 19 to 20 in Arlington, Va. Capinegro said many are expecting projected corn acres to be trimmed while those for soybeans are raised. However, one grain’s loss could benefit two major crops.

“Are they taking into consideration (the loss) of a lot of rice acres down south?” he said. “They’re going into corn and beans.”

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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.

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Last year, China imposed 100 per cent tariffs on Canadian canola oil and meal in retaliation to Canada’s tariffs on Chinese electric vehicles. A 75.8 per cent tariff on canola seed was also imposed. As a result, overall Canadian canola exports are down in 2025-26 compared to last year while Canada recently harvested a record-large canola crop.

Jamie Wilton, trader for RJ O’Brien in Winnipeg, said Carney’s visit with Chinese President Xi Jinping will have an effect on prices, depending on how discussions go. But he added that the hype leading up to the visit helped fuel canola’s rally earlier this month.

“We (also) had a massive fund short coming into this time period. Funds are short-covering and are hoping they are getting some export increase from China this year,” Wilton said.

Anti-government protests in Iran, threats of intervention in Iran by the United States, and drone attacks on a Russian terminal raised crude oil prices over the past week, which, in turn, supported soyoil and canola.

“Bean oil has a big fund short too. I think that they’ve combined to keep soyoil and canola rallying,” Wilton said.

Despite the South American soybean harvest being in its early stages, he said the canola trade is not focusing on it. Instead, Wilton and others believe that prices will depend on China’s actions or inaction.

“We’re all waiting for China and the news from the Prime Minister’s Office,” he said.

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Tony Tryhuk of RBC Dominion Securities explained that stability was uncovered in the canola market as the shorts covered their positions and buyers explored the long side.

“That’s been a feature that’s given us support,” said Tryhuk.

He also said there is more optimism among canola growers that a resolution in the trade war between Canada and China is on the horizon. Federal agriculture minister Heath MacDonald told Reuters that talks with officials during his recent weeklong trip to China were constructive.

“I think that has farmers waiting for (a resolution) to happen, or to see more of a conclusion of what will happen, whether it will proceed or not proceed, before their next round of sales,” Tryhuk said, adding that in the meantime, there is also strong demand from the domestic crush sector.

“We are seeing that, in general, the crush margins are profitable. We don’t ignore the biofuel component. We don’t ignore the soyoil input into the board crush calculations. But as that remains positive, you can expect to see ongoing consistent crusher participation in the market.”

The United States Department of Agriculture will release its World Agricultural Supply and Demand Estimates on Nov. 14 and Tryhuk said more current data could have a spillover effect on canola prices.

“We need that outside influence in order to determine where values are headed and getting some direction from the USDA should help us be in a better position to forecast soybean prices and from that, essentially make a decision where the price of canola is headed,” he explained.

Despite the probable end of the U.S. government shutdown and progress in Canada-China trade relations, he expects canola prices to stay rangebound in the coming days.

“The market has found an equilibrium given the (news) it has to work with. Until you get a new input that will change the outlook, (canola) will trade sideways, for sure,” Tryhuk said.

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