ICE canola weekly outlook: Biofuel optimism provides boost

Futures hit 18-month highs

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Published: May 14, 2025

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Glacier FarmMedia — ICE Futures canola contracts climbed higher during the week ended May 14, hitting their best levels in 18 months as proposed changes to biofuel policies in the United States lent support.

Amendments to U.S. biofuel policies proposed by the House Ways and Means Committee would see the Clean Fuel Production Credit, also known as the 45Z biofuel tax credit, extended through 2031. The proposal would limit feedstocks to those sourced from the U.S., Canada and Mexico. Canola-based fuels — currently deemed as too carbon-intensive for the credit — could also qualify for credits once again. “We flipped the script on U.S. biofuel,” said MarketsFarm analyst Mike Jubinville, adding that implementation of the proposals would mean “an open door for Canadian canola oil” heading to the U.S.

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Even if canola oil isn’t used for biofuel production in the U.S., the proposals would effectively keep three million tonnes of used Chinese cooking oil out of the U.S. market. If that’s replaced with soyoil, the edible vegetable oil market would still need to be filled by something, said Jubinville.

New plants and additions in the works could see canola crushers in Canada add an additional two million tonnes of crush capacity over the next year or two, said Jubinville.

In the near term, the July contract moved above major chart resistance of C$720 per tonne during the week but backed off its highs above that level. Weather conditions through the growing season will become more important in the weeks ahead, with canola seeding in its early stages across the Prairies.

About the author

Phil Franz-Warkentin

Phil Franz-Warkentin

Editor - Daily News

Phil Franz-Warkentin grew up on an acreage in southern Manitoba and has reported on agriculture for over 20 years. Based in Winnipeg, his writing has appeared in publications across Canada and internationally. Phil is a trusted voice on the Prairie radio waves providing daily futures market updates. In his spare time, Phil enjoys playing music and making art.

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