Canola futures have maintained their upward momentum for the better part of January since hitting contract lows in mid-December. March canola topped C$652.20 per ton on Friday, marking a third consecutive week of gains. Futures have benefited from speculative short-covering on the heel of higher prices from soybean oil and other vegetable oil markets.

Also helping the rally was the recent announcement that China would ease tariffs on canola imports from Canada. Shipments had been running about 41 percent lower than the previous season, according to the Canadian Grain Commission.

China is expected to cut tariffs on rapeseed to 15 percent on March 1, compared to the current 80 percent. In exchange, Canada will significantly cut tariffs on electric vehicles from China. Cooling tensions between the two countries could revive trade for a commodity that relies heavily on access to China’s market.

Bloomberg reported that Australia’s canola crop could rise 9 percent this season to 7.65 million tons due to unexpectedly strong late-season yields. Australia is the second-largest canola exporter after Canada.

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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS.