Update prepared by ISTA Mielke GmbH – Global Oil World analyses and forecasts for oilseeds, oils & fats and oilmeals in Hamburg, Germany. On www.oilworld.de more details are provided about the company profile and the individual services.
Insufficient supplies are likely to keep rapeseed prices well supported in 2025/26. Partly severe dryness in Canada and Australia as well as bullish vegetable oil demand prospects in North America sparked a rally in rapeseed & canola prices in the week to June 19. New-crop canola prices on the ICE reached a new contract high of CAN-$ 744, up 9% since June 5.
World supplies of rapeseed & canola are forecast to tighten further in 2025/26, with the prospective increase in world production of 1.8 Mn T more than offset by reduced old-crop stocks carried into the new season (down 3.5 Mn T from a year earlier). Combined rapeseed production in Ukraine, Australia and Canada, together accounting for 90% of world exports in calendar year 2024, is seen declining by 1.4 Mn T to a 4-year low of 27.9 Mn T in 2025/26, curbing world export supplies correspondingly.
Daily rapeseed & canola futures
EU rapeseed prices are currently torn between the prospective recovery of domestic production by an estimated 2.4 Mn T and the looming tightness in key exporting countries in 2025/26. This is primarily true for Ukraine, where production is set to decline by 0.7 Mn T to a five-year low of 3.0 Mn T this year. The threat of Ukrainian export duties to protect local crushers further complicates the situation. Australian export supplies are also seen declining sizably this season. This year’s Australian canola area reportedly declined to a 4-year low, limiting this year’s crop potential, especially if the required rainfall does not arrive soon.
Parts of Western Australia registered the lowest rainfall on record, according to the drought update of the Australian Bureau of Meteorology released on June 5. Soil moisture supplies deteriorated correspondingly, threatening crop development. We currently forecast the Australian canola crop to fall to 6.10 Mn T in 2025/26, a 5-year low and down 5% from a year earlier.
Canadian crushers are likely to benefit from insufficient US vegetable oil supplies in 2025/26, following the EPA proposal of a further sizeable increase in US renewable fuel usage in 2026 on June 13. Although the latest proposal includes a reduction of RINs generated by biofuel derived from imported foreign feedstock by 50%, we still expect a significant recovery of US imports of Canadian canola oil, primarily taking away market share from soya oil in the US food market.
On June 20, OIL WORLD forecast the Canadian canola crop at 18.8 Mn T in 2025 (vs. 19.1 Mn T produced in 2024), based on an are of 8.75 Mn ha (vs. 8.85 Mn ha registered in 2024) and a decline in the average yield to a 4-year low, taking the current depleted moisture supplies into account.
Price Outlook: Rapeseed oil is anticipated to be offered at price premiums vis-a-vis sunflower oil, soya oil and palm oil. The prospective further tightening of world supplies will make demand-rationing inevitable in 2025/26. Rapeseed prices will widen their premium over soybeans and sunflowerseed. In view of the prospective supply and demand as well as price prospects, OIL WORLD expects farmers in the northern hemisphere to step up rapeseed plantings in Aug and Sept 2025 to boost rapeseed production in the summer of 2026. A more detailed analysis can be found in the OIL WORLD Annual 2025.
Summary
Rapeseed prices are expected to stay high in 2025/26 due to tight global supplies, with lower production in key exporters like Ukraine, Australia, and Canada. Strong demand for vegetable oils and weather-related crop risks further support the bullish price outlook.