Tariffs Increase Pressure on Rapeseed and Soy Markets – Uncertainty Grows Amid US Trade Measures

Rapeseed prices on Euronext ended the week with slight losses. The most traded May futures contract fell by €1.25 to €515.50/t on Friday. The front-month February contract also saw declines, while new crop contracts remained nearly unchanged. At the CBoT, soybeans faced pressure after disappointing US export data, with the March contract dropping 16.50 ct to 1,044 ct/bu (368.74 EUR/t).

Tariffs Increase Market Uncertainty

On Saturday, February 1, 2025, US President Donald Trump officially implemented broad tariffs on imports from Mexico, Canada, and China. The measures include:

• 25% tariffs on imports from Mexico and Canada
• 10% tariffs on imports from China
• 10% tariffs on Canadian energy imports, including oil, natural gas, and electricity

The US administration justified the tariffs as part of an effort to protect American jobs and combat the illegal fentanyl trade. Trump also demanded that Canada and Mexico take stronger measures against illegal immigration.

In response, Canada and Mexico announced retaliatory measures. Canadian Prime Minister Justin Trudeau stated that Canada will impose 25% tariffs on US goods worth $155 billion, effective Tuesday. He urged Canadian consumers to prioritize domestic products and reconsider travel plans to the US. Meanwhile, Mexican President Claudia Sheinbaum also promised countermeasures, though she expressed willingness to cooperate in addressing drug trafficking issues.

Market Impact: Increased Volatility for Rapeseed and Soybeans

The new tariffs have injected significant uncertainty into agricultural markets. Canadian Canola is particularly vulnerable, as the US is a key export destination. With higher import costs, Canadian exporters may seek alternative markets, increasing pressure on EU rapeseed prices.

Soybean markets are also reacting nervously to the new tariffs. While recent price increases were driven by harvest delays in Brazil and drought conditions in Argentina, weak US export sales and escalating trade tensions are now weighing on sentiment.

• US weekly soybean sales totalled just 438,000 tons—far below analyst expectations (0.45–1.7 million tons) and down 70% from the previous week.

Key Developments to Watch

Beyond tariffs, South American supply remains a critical factor influencing oilseed markets. The Buenos Aires Grain Exchange recently cut its Argentine soybean production estimate to 49.6 million tons, citing drought conditions. Meanwhile, Brazil’s soybean harvest is progressing slowly, covering just 3.3% of the planted area, compared to 8.6% last year. Heavy rainfall in key producing regions is causing delays, adding to market uncertainty.

Outlook: Volatility to Persist

The coming weeks are expected to remain highly volatile as the market digests the new US trade measures. If Trump escalates tariffs further, targeting China or the EU, agricultural markets could face even greater disruptions.

Analysts warn that these tariffs may fuel inflation and slow economic growth—not just in the US, but globally. Traders will closely monitor trade negotiations and weather conditions in South America, as these factors continue to shape the outlook for oilseed markets.

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