Grain Snippet: Canola Continues to Firm
South Australian canola prices for the 26/27 season broke above $800/MT for the first time last week. Canola prices have been in a steady uptrend since the beginning of the year, and the latest strength continues to be coming from higher global crude oil prices. Global oilseed prices, including European rapeseed futures and Canadian canola futures have followed crude oil higher as 30% of global oilseed consumption is for biofuel production.
US soybean oil prices have rallied over 50% to US$77/lb since Christmas as diesel manufacturers weigh up the price relativities of crude and vegetable oils. Adding to the rally in soybean oil has been Funds buying US soybean oil futures and they have now built a record net long position of 172k contracts after being short at the end of 2025. The rally in soybean oil futures has been supportive of Canadian canola futures prices (up 22%), as the US is the major export market for the annual 3.2MMT of Canadian canola oil exported annually, which is used primarily for biofuel production. Prices for soybean oil have rallied stronger than Canadian canola due to soybean oil starting from a lower base. US soybean and products (meal and oil) futures prices had been weighed on by the trade war between China and the US, with China suspending / limiting US soybean purchases. A trade meeting between the two countries is due to be held soon and some market participants believe soybeans will be back on the agenda adding support to soybean prices.
Staying with China, the country has turned the tap back on for canola imports, receiving 247kMT of canola seed in March which is the most since May’25. Australia was the major supplier for March with 184kMT shipped after a 5-year hiatus. Canada has also picked up exports to China, shipping 50kMT after punitive tariffs by China were reduced in Mar’26. However, the imports are still a far cry from the average of 500kMT per month average between Jan’23 and Apr’25.
Looking to South Australia, rains over the weekend helped canola planting sown through April into good soil moisture conditions. The area sown to canola in SA has increased slightly to an estimated 250kha, up 10% y/y due to a much better start to the season and higher prices relative to other crops and agronomic benefits. Western Australia has also seen an increase in canola plantings following rainfall from ex-tropical cyclones and poor wheat prices. The Grains Industry of WA (GIWA) in their April report forecast the WA canola crop to increase in area to 2Mha up 0.27Mha (15%) y/y. Conversely the area planted to canola in NSW is expected to decline significantly on last year due to ongoing drought and lack of timely rainfall in the forecasts.
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