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Canola Market Summary
- Greg Petersen
- Dec 5, 2025
- 3 min read
Canola Market Summary– December 5, 2025
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I know a lot of you have been asking about what has happened to the canola market in the last few days. As we know, STATSCAN gave us a bumper crop of about 21 MMT. However, the trade had assumed it would be this large. Regardless, the market still tanked and is likely to stay down in the near future. In my opinion I still believe that the market will rally back up to $630-$650/mt although it probably won’t happen until the new year. I believe the strength of soybean oil will be the main driver. This means we should get one more shot at hitting that $14/bu mark although it may be later in the year. USE TARGETS and MOVE FAST. This is not a market you want to horse around in.
Below is some work I was doing with ratios. I’ve tracked this stuff for years in the background and I can tell you with certainty that canola is undervalued and will rally—what we don’t know is how big the discount stays. In theory, the long-term ratio puts canola at about $716/mt, but with the kind of supply we’re sitting on and softer demand than other years, we’ve got a built-in discount. That discount could be as wide as $100/mt, but realistically I’d peg it closer to $50, which puts a more believable futures target somewhere in the mid-$650s. Which means mostly like the price would range from 630- 650.
What’s Going On With Canola Prices Right Now
When you compare canola futures to soybean oil futures (adjusting for currency and averages), the ratio is basically telling us canola is too cheap. Historically that ratio sits between about 9.95 and 10.58—two-thirds of the time it lives right there. Right now it’s sitting down around 8.5–8.9, which is miles below normal.
If canola were to trade back where it “should” relative to soy oil, January futures would be closer to about $716/mt instead of the mid-$620s. That doesn’t mean we magically go there next week, but the math is the math: canola is undervalued.
Why Is Canola So Cheap?
Three big reasons:
Big 2025 crop. Canada grew a big one, and global oilseed supplies are generally heavy. Lots of tons = lower prices.
Exports are a mess. China slapped a 100% tariff on Canadian canola oil and meal back in March. That killed a huge chunk of demand. The EU is also taking less. Stocks pile up when nobody’s buying.
Soy oil is strong. U.S. renewable diesel demand keeps soy oil buoyed at 52–53¢/lb. So soy oil stays strong while canola lags behind.
Where Do Prices Go From Here?
I think we get a rebound, just not a rocket ship. Something in the 630–650/mt range seems doable heading into early 2026, especially if export flow picks up like it usually does later in the winter.
If China backs off on tariffs or the EU steps back in, then yeah—we could see 660–690/mt sometime mid-year. But there’s risk on the downside too: weak crude, more supply, or continued export pain could drag us back to the 600–610 area.
Overall, I’m cautiously optimistic, but not drinking the Kool-Aid. A fair, non-fairytale price is about $630-650/mt if things go our way.
What’s the Realistic Discount?
That perfect-world number of $716/mt is just that—perfect world.
Based on where we sit today:
$50/mt discount → most realistic
$25/mt discount → possible if exports suddenly improve
$100/mt discount → possible if supply grows and nobody steps up to buy
So a realistic target is around $630–650/mt, not $716.
What Does This Mean For You?
Short term: Hold if you can. We’re likely headed a bit higher, and any export news—especially China—could flip the switch.
Long term: Canola still pencils well against cereals, but watch soy oil and weather in South America.
Risks: High supply and weak demand could keep a lid on prices, so keep your targets in place and be ready to move.
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