The Canada oilseed production decline projected for 2026-2027 is drawing significant attention from global agricultural markets. According to a report from the United States Department of Agriculture’s Foreign Agricultural Service (USDA FAS), total oilseed output in Canada is set to fall notably in the coming season. Furthermore, the forecast covers all major crops, including canola, soybeans, and sunflower seed. Therefore, buyers and traders in global oilseed markets should factor these projections into their procurement strategies.
Canada Oilseed Production Decline: Total Output and Canola Outlook
According to the USDA FAS report, total oilseed production in Canada — including canola, soybeans, and sunflower seed — is projected to decline by 4% in 2026-27, reaching 27.55 million tonnes. Moreover, canola production specifically is expected to fall by an estimated 8% to 20.11 million tonnes. This is down from a record 21.8 million tonnes in 2025-26.
Additionally, seed exports will decline in 2026-27, as most canola will be processed domestically rather than exported as raw seed. According to the FAS, regulatory uncertainty surrounding canola exports to the US for 2026 and 2027 has been resolved. As a result, this has increased the share of seed sent for processing for export. Consequently, processing volumes are expected to increase by 2.5% in 2025-2026 and by nearly 7% in 2026-2027.
However, domestic processors may not have the market entirely to themselves. FAS notes:
“However, processors may face increased competition for seed from Chinese buyers due to a significant reduction in trade barriers, which will allow for increased export volumes.”
Rapeseed Oil Production and Biofuel Demand Drive Export Growth
Despite the Canada oilseed production decline at the seed level, downstream processing is trending upward. Rapeseed oil production is estimated at 5.3 million tonnes in 2026-2027, up nearly 7% from the previous year. Furthermore, demand for biofuels in the US is expected to drive record demand for Canadian canola oil in 2026-2027. Exports are projected to reach 3.6 million tonnes, up from 3.4 million tonnes in 2025-2026.
Soybean Production Recovery and Record Export Performance
Soybean production in 2026-27 is expected to reach 7.37 million tonnes, up from 6.79 million tonnes in the previous year. This increase follows a difficult earlier period. Specifically, intense summer heat and severe moisture stress in key growing regions led to a nearly 11% decline in production during that prior season.
Moreover, the soybean export picture is notably strong. Soybean exports for the 2025-26 season have reached a record high, increasing 3% year-on-year to 4.49 million tonnes. This reflects record levels from previous harvests and is potentially driven by increased demand from US biodiesel producers.
Source: Oleoscope (Russia)