Large global supplies raise questions on buyers exports prices and demand
Global grain and oilseed markets are entering 2026 with ample supplies. Many major producing countries experienced favorable growing conditions, leading to strong harvests. Canada followed this trend, producing a record 107 million tonnes of grains and oilseeds. This output exceeded the previous record set in 2020 by nearly seven million tonnes and stood about 16 percent above the five-year average. With so much supply available worldwide, the key question is who will buy Canadian production and how prices may respond.
Figure 1. Canola export volumes hit by trade turmoil
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Sources: CGC, AAFC, FCC Economics
Canada exported 57.4 million tonnes of grains and oilseeds during the 2024–25 crop year. However, exports are expected to decline to about 55.3 million tonnes in 2025–26. Wheat exports have performed well so far, but other major crops have struggled. Canola and peas, in particular, face slower demand due to high global supplies and restricted market access.
Trade barriers remain a major concern. Canadian producers continue to face tariffs from China on canola, canola products, and peas. India also maintains tariffs on yellow peas and lentils. These trade challenges limit Canada’s ability to move product into key international markets, adding pressure to export volumes.
Canola exports shipments are running well below normal levels and are roughly 20 percent under the average pace needed to reach official export targets. While Agriculture and Agri-Food Canada projects exports near eight million tonnes, current trends suggest volumes could fall closer to 6.5 million tonnes. According to FCC Economics, this gap reflects both trade uncertainty and intense global competition.
The FCC Economic Report was released prior to Canada announcing some tariff reductions on Canola seed from China, read: Canada Negotiates Tariff Reductions on Canola Seed by China (link to https://www.farms.com/ag-industry-news/canada-negotiates-tariff-reductions-on-canola-seed-by-china-318.aspx)
Domestic demand offers only limited relief. Although a new canola crushing facility is expected to begin operations, Canada’s domestic market cannot absorb large additional supplies on its own. As a result, exports remain critical for balancing supply.
Unless new foreign buyers emerge, ending stocks are likely to grow. Says FCC Economics, export trends over the coming months will play a key role in shaping prices and influencing farmers’ planting decisions for spring 2026.
Photo Credit: gettyimages-giovanni1232