Overview
ICE canola futures declined on Thursday alongside soybean oil after an interim agreement aimed at ending the U.S.-led conflict with Iran pushed crude oil prices down to early‑March levels. The July canola contract (RSN6) dropped $10.10, settling at $728.90 per metric ton, while the November contract (RSX6) fell $11.80 to $734.30.
Price Drivers
Canola prices and other vegetable oils have been falling throughout the week as lower crude oil prices reduce the demand for biofuels. Crude oil prices reached their lowest point since before the Iran conflict began in late February, reflecting the market’s response to the interim agreement that seeks to end hostilities, reopen the Strait of Hormuz and ease sanctions on Tehran, thereby improving the global oil supply outlook.
Market Commentary
Tony Tryhuk, director of commodity futures at RBC Dominion Securities, indicated that canola prices have further downside potential if crude oil continues to decline and commodity funds maintain liquidation of their positions.