The Wednesday HOT TAKE

Canola moved into new highs again today, supported by strength in the energy complex, continued catch-up to soybean oil's rally, and a less-than-ideal start to planting across parts of Canada.

November futures closed up 2.6% at CAD 802/MT — the first time the most-active contract has traded above CAD 800 since 2023.

Adding support, Australia's first 2026/27 crop forecast pegged canola production at 6.2 MMT, down 20% from last year, as dry conditions slashed acreage in New South Wales and pushed growers toward barley.

With weather concerns building in both Canada and Australia — which account for nearly 75% of global canola exports — the market remains highly sensitive to any threat to exportable supplies.

Although canola grabbed all the attention today, the wheat side of the Australian balance sheet is also worth watching.

ABARES projects 2026/27 wheat production at 26.7 MMT, down 26% from last year, with acreage falling to its lowest level since 2019/20.

Forecasts currently call for a 60-80% chance of below-normal winter rainfall across much of the country's grain belt, while elevated fertilizer costs have created uncertainty around how aggressively growers will top-dress crops with urea later this season.

With El Niño concerns beginning to creep back into the conversation, Australia's wheat crop remains far from a done deal.

And while higher energy prices are raising input costs and creating uncertainty around fertilizer application rates, they continue to support the very biofuel demand driving soybean oil and canola higher.