The American rapeseed oil market in early July saw a moderate but anticipated pullback in prices because of seasonal harvest movement and acreage increase. However, weather-related uncertainty mitigated against the downside in rapeseed oil prices and was also underpinned by solid biodiesel demand fundamentals, with the market set to be reborn ready to be responsive again to price if global weather or energy policy news turns around in coming weeks.
During early July 2025, the U.S. rapeseed oil (canola) market witnessed a significant price downward adjustment due mainly to seasonal harvest pressure, higher planted acres, and variable weather trends in the important growing areas.
With gradual improvement in early Q2, on the strength of low carryover stocks and doubt about world production, U.S. rapeseed oil prices declined as the new-crop harvest season got into full swing in the Northern Plains and Pacific Northwest. The U.S. Department of Agriculture (USDA) previously forecast almost an 8% year-over-year rapeseed oil acreage gain for the 2025 crop year underpinned by solid domestic biodiesel fundamentals and profitable farm-level economics relative to other oilseeds.
As the harvest season rolled into July, this increased acreage manifested itself in greater supply availability for rapeseed oil, leading to a natural price correction on including those for rapeseed oil, particularly in the spot and near-term delivery contracts.
In addition, adding to the pressure to the downside was the overall global feeling of softening rapeseed oil markets in general, particularly in the European Union and Black Sea markets, where harvest pressure and softening biofuel demand resulted in declining prices. U.S. futures also closely tracked this pattern, with Midwest average bids falling by month's end.
Pacific Northwest also experienced parallel pricing behaviors for rapeseed oil, especially with Canadian supply expectations holding steady to support competitive cross-border trade movements. Still, the U.S. market was somewhat buffered by localized weather issues and ongoing support from the biodiesel blending mandates of the Renewable Fuel Standard (RFS). Periodic drought in selected areas of North Dakota and Montana caused somewhat mixed yield prospects, introducing a level of supply-side uncertainty. Such weather-related risks served to forestall a more precipitous collapse in prices, particularly for Q4 2025 deferred contracts.
At the same time, U.S. oilseed crushers and biodiesel producers continued to demand canola oil, which is highly prized for its high oxidative stability and low sulfur content—qualities that are favorable for second-generation biofuels. This industrial foundation lent insulation against broad bearish pressure. Players in the market also monitored trends in global oilseed dynamics, notably soybean oil and palm oil prices, influencing rapeseed oil substitutes for use in food and energy applications. Since soybean oil prices were relatively firm and palm oil underperformed, rapeseed oil retained its competitive edge, with even demand, thereby keeping the prices on the lower side. While traders at the same time focused on clearing the stocked-up inventories first ahead of anticipation of newer arrivals.
