Canola futures continued their strength this week on news of China returning to the Canadian export market. March canola traded $350 higher on Wednesday to close at C$650.20 per ton. Prices have struggled to trade above Friday’s highs but have broadly held up near short-term resistance levels.

Bloomberg reported that China bought 10 cargoes of Canadian canola, or about 600,000 metric tons, for delivery between March and April. The purchases come as the nations reached a tentative deal to thaw tensions.

Canadian canola exports totaled 288,200 metric tons during the week ending Jan. 18. Cumulative shipments for the marketing year rose to 3.2 million metric tons, nearly 40 percent lower than a year ago.

Meanwhile, Chinese customs just cleared a test shipment of canola from Australia, which could open the door to Australia also becoming a rapeseed supplier for China. The country had been shut out of China’s market since 2020 due to alleged phytosanitary concerns. However, that shifted last year after China bought trial cargoes of Australian canola amid the trade fallout with Canada.

If trade restrictions ease for both countries, competition over access to China’s market could increase.

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