Since December, ICE rapeseed futures have faced sustained downward pressure. Domestically, rapemeal and rapeseed oil futures have similarly been under pressure. Although they rebounded slightly after prolonged declines, the overall recovery has shown clear signs of weakness.

Global Rapeseed Production Forecasts Revised Upward, Intensifying Supply Pressure

Canada's rapeseed industry is currently mired in a structural dilemma of “abundant harvests meeting sluggish sales,” with the core contradiction lying in the stark contrast between record-breaking production and extremely weak export demand. Specifically, Statistics Canada's latest report confirms that the 2025/2026 crop year will yield 21.8 million metric tons of rapeseed. This not only sets a new historical record but also significantly exceeds the market's previous forecast of 21.25 million metric tons. Compared to the September estimate, this represents a substantial upward revision of 1.77 million metric tons, with a year-on-year increase of 2.56 million metric tons—a substantial 13.3% growth. Coincidentally, the USDA's December supply and demand report also raised its forecast for Canada's 2025/2026 rapeseed production to 22 million metric tons, further reinforcing expectations of ample Canadian rapeseed supply. Canada's unexpectedly strong rapeseed production growth stems primarily from favorable weather conditions and expanded planting areas. This fundamentally shifts the country's rapeseed supply-demand balance, exerting significant downward pressure on ICE rapeseed prices. Furthermore, upward revisions to Russia and Australia's production forecasts further solidify the global rapeseed supply surplus narrative. In its December supply and demand report, the U.S. Department of Agriculture raised its forecast for global rapeseed production in the 2025/2026 season by 3 million metric tons to 95.273 million metric tons. Within this, Russia's production was increased by 500,000 metric tons to 6 million metric tons, representing a 29% year-on-year increase, while Australia's output was raised by 500,000 metric tons to 7.2 million metric tons, a 12.5% year-on-year increase. The combined output increases from these two major producers, coupled with Canada's record-high production, further bolstered the global rapeseed supply landscape, intensifying supply pressures in the international rapeseed market.

Weak Canadian Rapeseed Exports: Absence of Chinese Market

However, despite the substantial supply expectations, Canadian rapeseed exports have experienced a significant decline, creating a situation of increased production but stagnant sales. The primary reason lies in the absence of the Chinese market. China's imposition of import guarantees and additional tariffs on related products has caused a sharp drop in Canadian rapeseed exports to China this year. By September 2025, Canada's cumulative exports to China totaled only 2.33 million tons, a significant 42% year-on-year decrease. Although Canada has increased exports to other countries, this has been insufficient to compensate for the loss of the Chinese market. By September 2025, Canada's global rapeseed exports for the year totaled 5.64 million tons, down 6.2% year-on-year. This decline in Canadian rapeseed exports has prevented the domestic market from absorbing the pressure of a record harvest, creating immense sales pressure for farmers. Although domestic crushing increased slightly by 1.1% year-on-year to 3.94 million tons, it remains insufficient to alleviate the oversupply pressure, which also constitutes a significant downward pressure on ICE rapeseed futures prices.

Imported Rapeseed Stocks Depleted; Focus Shifts to Australian Rapeseed Arrivals

Domestically, imported rapeseed inventories have been depleted. With the shift in import sources, future supply will primarily depend on the new Australian crop. Specifically, by early December 2025, imported rapeseed inventories at coastal oil mills had fallen to zero. Data from SteelHome indicates that inventories at major ports including Fujian, Guangdong, Guangxi, Liaoning, and Jiangsu have remained at zero. The direct cause is the near-complete halt in Canadian rapeseed imports, resulting in zero crushing volumes and zero rapeseed oil/meal production at coastal mills. Domestic crushers have entered a raw material shortage period, shifting market focus entirely from inventories to the arrival pace of new-crop Australian rapeseed. Currently, Australian rapeseed arrivals remain driven by market sentiment anticipating supply relief, without forming a large-scale, stable supply stream. This situation maintains tight domestic supply of high-quality crushing raw materials, thereby supporting domestic rapeseed prices. Simultaneously, it creates uncertainty regarding the timing and volume of future supply recovery. Consequently, the actual arrival schedule, shipment volumes, and subsequent crushing operations of Australian rapeseed have become the core variables determining whether domestic rapeseed oil and meal inventories can be rebuilt. Continuous monitoring of vessel purchase volumes and port unloading activities is essential moving forward.

Weak Demand for Rapeseed Meal and Oil: Persistent Dual Weakness in Rapeseed Supply-Demand Dynamics

On the demand side, the current period marks the seasonal off-peak for rapeseed meal consumption, with particularly sluggish performance. Downstream aquaculture and feed demand have yet to show substantive improvement, lacking effective incremental support. Market trading activity remains subdued, with overall transaction volume insufficient. Data from SteelHome indicates...

On the demand side, rapeseed meal is currently in its seasonal consumption slump, exhibiting particularly weak performance. Downstream aquaculture and feed demand has yet to show substantive improvement, lacking effective incremental support. Market trading activity remains subdued, with overall transaction volume insufficient. According to SteelHome data, coastal oil mills' rapeseed meal pickup volume stands at a mere 0.01 million tons, hitting an absolute historical low. Despite extremely low rapeseed meal inventories at coastal oil mills, weak demand fails to provide effective price support. Concurrently, rapeseed meal demand faces competitive pressure from other meal products like soybean meal. While soybean meal prices remain elevated, its cost-effectiveness is low, which partially limits the downside potential for rapeseed meal prices. Consequently, the rapeseed meal market exhibits typical characteristics of both weak supply and weak demand. In the rapeseed oil market, demand also remains sluggish, though influenced more by structural factors. Coastal oil mills recorded rapeseed oil pickups of 0.22 million tons, a slight month-on-month decline, with sparse spot trading and sluggish downstream procurement. High inventories remain the primary demand suppressor. As of the week ending December 5, commercial rapeseed oil inventories in East China and coastal regions stood at 347,000 tons. Despite nine consecutive weeks of inventory drawdowns, absolute levels remain near historical averages and exceed those of the same period in 2020 and 2022. Additionally, soybean oil's cost advantage significantly squeezed rapeseed oil consumption. Unlike rapeseed meal's seasonal demand slump, rapeseed oil still held some restocking expectations. However, with crushing plant utilization rates expected to rebound and rapeseed oil supply poised for recovery-driven growth, downstream buyers showed weak actual purchasing intent and strong wait-and-see sentiment. Consequently, the recent sustained drawdown in rapeseed oil inventories has weakened its supportive effect on rapeseed oil futures prices. Market expectations have shifted toward a recovery in rapeseed oil inventories. Simultaneously, constrained by substitution from soybean oil, the rebound potential for rapeseed oil futures prices remains limited. Overall, the rapeseed meal and rapeseed oil market is caught between the immediate pressure of weak supply and demand and the anticipation of future supply-demand recovery.

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