The USDA, in its March 31 Prospective Plantings Report, indicated North Dakota canola producers intend to plant 2.05 million acres of canola in 2025, a decrease of four percent from last year’s record acreage. This estimate is higher than estimates from many industry observers, with actual numbers likely to be 1.8 million acres or even a little lower. The next acreage report will be released June 30 when the USDA issues its June Acreage Report.
For the U.S., the USDA said producers intend to plant 2.56 million acres this year, down six percent from last year’s planted area. Compared with last year, planted area is expected to decline in five of the seven canola-producing states, with an increase in Kansas and Washington. While the biofuels industry growth was expected to increase canola acres in southern and southeastern states, so far this has not been the case as acres in Kansas and Oklahoma remain below 30,000 acres.
Canola crush in the U.S. is projected at 4.9 billion pounds, up six percent from the prior year. This will be the highest canola crush on record for the U.S. It also projects a season-average price of $20 per hundredweight for canola, down from $24 last year.
Recent monthly statistics show a slowdown in canola crush in the U.S. as 170,856 metric tons (MT) of canola seed was crushed in February, down 17 percent from one year ago and also from January. Canola crude oil produced was 132 million pounds, down 18 percent from January and down 21 percent from one year ago. Soybean oil crush in the U.S. was also down in February, but not by as much.
Canola crush in Canada remains robust as the crop year-to-date total of 7.5 million metric tons exceeds last year by nearly nine percent.
The U.S. Energy Information Administration reported a significant slowdown in the use of canola oil and soybean oil feedstocks for biofuel use in January due to a lack of policy clarity on the 45Z regulations. Canola oil use was down 63 percent from December as just 49 million pounds were used in biodiesel and 144 million pounds were used in renewable diesel. This was the lowest monthly level since 2023.
The U.S. Canola Association submitted comments in response to the 45Z Guidance issued in January. Many improvements in the calculation of carbon intensity for canola were suggested as well as a request to remove Indirect Land Use provisions and provide a safe harbor level of support for canola.
Soybean oil use also dropped significantly as 654 million pounds were used for biofuels, down 40 percent from December. As a result of these disappointing numbers, a strong effort has been made to urge the EPA to revise its Renewable Fuel Standard (RFS) volumes for 2026 and 2027 to much higher levels.
Biofuel interests and petroleum interests met with officials asking that the mandate be raised to 5.25 billion gallons, up from 3.35 billion gallons. This would be in line with industry production capacity and would help to stop the plant closures that have begun. News of an agreement between biofuel and petroleum interests provided some support to the vegetable oil market. Some senators in Congress have also led a call for higher RFS volumes to support clean energy and rural economies.
The oilseed industry is waiting for a formal proposal from the EPA, possibly within weeks, which will start the rulemaking process.
Markets have been whipsawed recently due to the news on tariffs, but the canola market overall has strengthened significantly from its March lows, yet it has not recovered all of its losses. Analysts point to the tightening canola stock situation as one factor, along with the potential increased demand for canola oil in the U.S. as used cooking oil imports from China will be shut out of the market for use in biofuels.
The May ICE canola futures finished on April 9 at CAD $651 per MT, up $5.20 on the day and up $63 in the last two weeks. The July ICE canola futures contract closed at $658 per MT, up $6.10 on the day and up $64 in the last two weeks.
Local cash prices on April 9 at nearby crush plants ranged from $19.86 to $21.25 for April and May deliveries, up $1.90 to $2.70 per hundredweight in the last two weeks. June and July canola prices ranged from $19.51 to $21.35, up $2.20 to $2.30 per hundredweight in the last two weeks.
The Northern Canola Growers Association recently approved over $500,000 in canola research funding for 2025 that address many production issues for growers. Nearly $900,000 in requests were submitted. Research will be conducted by North Dakota State University, South Dakota State University and the USDA Agricultural Research Service.
Canola acres ease back from record levels