Canola futures continued their rally this week amid the surge in soybean oil and the return of Canadian exports to China. May canola traded nearly 2 percent higher on Monday morning, topping at a six-month high at C$700 per ton.

Soybean oil futures pushing to new contract highs overnight helped support other vegetable oils. Spillover support came largely from the escalating conflict in the Middle East after the U.S. launched strikes against Iran over the weekend.

Bloomberg reported that China said it will slash its tariff rate on Canadian canola following a 17-month anti-dumping investigation. Canadian Prime Minister Mark Carney said tariffs could drop significantly to 15 percent.

As of Feb. 22, Canada exported 4.27 million metric tons (MMT) of canola for the 2025/26 season, according to the Canadian Grain Commission. Shipments were down 29 percent from the same period last year.

Meanwhile, Australia confirmed that its first cargo of Canola cleared China customs in late January after a five-year hiatus. Despite China reopening access to Canada, the country could face increased competition from Australian exporters.

Australia’s Department of Agriculture forecasts the country’s canola production to hit 7.7 million metric tons (MMT) in the 2025/26 season, up 20 percent year-over-year and the second-largest on record. Crop prospects improved significantly through the season despite a dry start in Western Australia, according to a monthly report.

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