Analysts in Canada doubt further growth in rapeseed prices

Rapeseed futures on Canada’s Intercontinental Exchange declined, with one analyst expressing a pessimistic view on the market’s near-term prospects. According to the analyst, the recent price rally was largely technical in nature, driven by farmers holding back sales rather than by a fundamental shift in demand.

“Farmers believe that Chinese purchases will continue to support rapeseed prices,” the analyst noted, but added that the market’s upside potential appears limited. He warned that investment funds can only push prices to a certain level before momentum fades, suggesting that expectations of a strong spring market may prove overly optimistic.

The analyst also indicated that China is likely to refrain from additional rapeseed purchases until futures prices decline, potentially when the market becomes overbought by funds. Additional pressure on rapeseed prices came from losses in the Chicago soy complex and the MATIF rapeseed market. While rising Malaysian palm oil prices helped offset some of the decline, falling crude oil prices weighed on the broader vegetable oils sector.

Tags: prices, Canada, rapeseed