Canola futures are set to rise for a fifth consecutive week amid follow-through buying from comparable commodities. March canola traded slightly higher on Friday, holding gains just below C$664 per ton, the highest in about two months.

Prices continued to rally this week amid market optimism from the soybean complex that China would purchase more U.S. supplies this season. Additionally, previous news that China will return to the Canadian canola import offered tailwinds for the market.

While recent news has been positive, bearish market fundamentals of larger supplies could limit gains. Statistics Canada reported that Canadian canola stocks at the end of December totaled 15.62 MMT, up 18.1 percent year-over-year. That came from a 21.2 percent boost in on-farm stocks, which offset a 7.4 percent decrease in commercial stocks.

The agency said higher production in 2025 pushed total opening supplies of canola up 4.2 percent to 23.5 million tons by the end of 2025.

Higher domestic crush has helped offset lower exports. Canadian canola crushings totaled 1.08 million metric tons (MMT) in December, up 6 percent year-over-year. Year-to-date crushings reached 11.55 MMT, rising 1.6 percent from the previous year and hitting a record.

U.S. canola crushings totaled 193,387 tons in December, down 14 percent year-over-year, according to the USDA on Monday. Total crushings for the calendar year totaled 2.24 million metric tons, which were down 7.2 percent from the previous year.

Agriculture and Agri-Food Canada released its first crop forecasts for the upcoming 2026/27 season. Canola seedings are expected to rise slightly from the previous season to 8.92 million hectares (22 million acres). Expectations of yields normalizing have the first production forecast pinned at 19.2 MMT, down from the record 21.8 MMT last season.

Additionally, ending stocks are expected to tighten, though the average price is forecast to decline from C$665 to C$640 per ton.

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