Canola has gained strength recently, following strength in soybeans and palm oil. Concerns over flooding in Brazil, dryness in eastern Europe, and more bullish USDA estimates of commodity production for 2024 has provided strength in commodities.

The USDA reported in its monthly Oil Crops Outlook that canola production in the U.S. is expected to be 4.1 billion pounds, with canola crush increasing to 4.62 billion pounds, up marginally. Canola ending stocks are expected to increase slightly and average prices are projected at $21 per hundredweight.

While canola oil imports have been revised up, canola oil production will remain unchanged. Robust growth of 7 percent is predicted for canola oil in the U.S. Food use will increase 2 percent, while biofuel use will increase 15 percent. It raised its estimates of canola oil use in biofuels for the second month in a row to 4.6 billion pounds, up from 4 billion pounds last month.

The USDA expects global production of oilseeds to increase and global rapeseed production to be down on reduced production in the EU and in Australia. Ending stocks will decline to 7.8 million metric tons (MMT), down from 8.1 MMT the previous year.

Agriculture & Agrifood Canada (AAFC) in its May report increased its 2023-24 estimates of canola crush in Canada by 200,000 metric tons (MT) to 10.7 MMT, while also increasing next year’s crush estimate by 500,000 MT to 11 MMT. It revised lower its estimate of canola exports from 7 MMT to 6 MMT for 2023-24 and from 7.7 MMT to 6.9 MMT for next year. Exports are down due to growing domestic crush and competition from large supplies of competing oilseeds.

The changes resulted in ending stocks being revised upwards for both years to 2.5 MMT, much higher than recent years, but near historical averages. The higher ending stocks estimates did not change its price forecasts for the coming crop year, remaining at Canadian $675 per MT.

The downward revisionsin exports were expected as actual shipments were below the amounts needed to meet the original, more robust estimates of over 7 MMT. The primary export destinations are China, Mexico, and Japan.

The USDA in May revised its estimates of 2024-25 canola exports from Canada up by 350,000 MT to match Canadian estimates of 6.9 MMT. It differs in its estimate of Canadian crush, estimating 11.8 MMT compared to AAFC’s 11 MMT. Canadian canola crush is expected to make a record leap in 2025-26 to over 15 MMT due to a record number of new and expanded crush plants coming online, primarily in Saskatchewan.

The July ICE canola futures finished the session on May 22 at $665 per MT, up $.40 on the day and $9 in the last two weeks. The November ICE canola futures contract closed at $687 per MT, up $2.20 on the day and $14 in the last two weeks.

Local cash prices on May 22 at nearby crush plants ranged from $21.20 to $22.08 for May and June deliveries, up approximately $.70 to $1.20 per hundredweight in the last two weeks. July and August canola prices ranged from $20.87 to $22.08, up $.20 to $.40 per hundredweight in the last two weeks.

Weekly crop progress reports show that canola planting progress in North Dakota is at 43 percent as of May 20, ahead of 31 percent average. Seven percent of the canola has emerged, near 4 percent average. In Montana, 54 percent of the canola has been planted, while only 5 percent has emerged, below the average of 11 percent.