Canola futures have moved higher over the past number of weeks, with the nearby July contract seeing particularly strong gains compared to new-crop November.
As can be seen on the futures chart below, the July contract touched a low of around $570/tonne in mid-March before churning mainly higher since. From that low to the April 17 high of around $687, the contract added more than $117 or about 20.6%. On the other hand, the November contract (chart below) was up about $75 or less than 13% over roughly the same period.
The stronger gains in the nearby July contract versus November have been attributed to the increasingly tight old-crop Canadian canola supply and the market’s need to ration the remaining stockpile before the 2025 crop becomes available later this summer.
In fact, it is clear canola usage must slow over the remainder of the crop year. The Canadian Grain Commission (CGC) reported cumulative 2024-25 canola exports as of April 13 at 7.382 million tonnes, already at 98% of Agriculture Canada’s full year forecast of 7.5 million with more than three months still left in the current marketing year. Meanwhile, total domestic use as of April 13, reported by the CGC at just over 8 million tonnes, is running 13% above the five-year average and at 64% of the full year forecast.
China last month imposed 100% tariffs on imports of Canadian canola oil and meal, but shipments of canola seed continue to move well.
In its April supply-demand update, Ag Canada left its 2024-25 canola numbers unchanged from last month, but its did raise its 2024-25 season average price forecast by $10/tonne to $655 - still well below the 2023-24 average of $715.
Canola ending stocks for 2024-25 are projected by Ag Canada at 1.3 million tonnes, down sharply from 2.748 million the previous year and a 12-year low if realized.
July canola: source – Barchart
November canola: source - Barchart
