FX.co ★ Canola Rises Toward 1-Month High

In late July, canola futures were trading around CAD 700 per tonne, approaching their highest point since the beginning of the month. This uptick can be attributed to the growing demand for biofuels and a sudden surge in the US dollar. The United States recently agreed to lower tariffs on European Union imports to 15%, strengthening the US dollar and subsequently increasing the prices of commodities when measured in other currencies. Concurrently, the US Environmental Protection Agency has proposed an initiative to raise the amount of biofuels that oil refiners will be required to blend into domestic fuel supplies starting next year under the Renewable Fuel Standard. This development has bolstered the markets for canola and rapeseed, given their significant role as biodiesel feedstocks in North America and Europe. However, the potential for further price increases has been moderated by favorable weather conditions in Canada and the US, which are contributing to a plentiful supply.