“Black Friday” for rapeseed and canola prices came early

The catastrophic drop in rapeseed and canola prices on world markets continues, driven by lower soybean oil prices and the new US administration’s intention to impose duties on canola and oil from Canada.

A significant speculative overbought of futures was followed by a sharp sell-off in contracts caused by the possible introduction of the duty.

January futures for canola on the Winnipeg stock exchange yesterday fell another 2.6% to 565 CAD/t or 403 $/t (-14.3% since November 15), which increases the pressure on quotations in the EU.

February futures for rapeseed on the Paris MATIF yesterday fell 2.8% to 493 €/t or 520 $/t (-10% for 10 days), which will negatively affect European farmers who held back sales in anticipation of higher prices.

In Ukraine, most farmers have sold rapeseed at high prices, so now its stocks are minimal.

Lower prices for soybean oil also put pressure on rapeseed prices. the December futures for soybean oil on the Chicago stock exchange yesterday fell 4.4% to 900 $/t (-11.2% since November 15) due to uncertainty about the fate of the program of tax incentives for biofuel producers in the United States.

Traders fear that the trump administration will not keep the credit for blending biofuels in the United States, which must be renewed by the beginning of January 2025.

The U.S. biofuel industry is the largest buyer of Canadian canola oil, so lobbyists are trying to get Canadian canola exempt from Trump’s tariff and maintain tax breaks for biofuels, as almost all biofuel plants are located in the pro-Trump Midwest, and farmers who supported Trump will be the first to suffer from the reduction in processing.

Perhaps, the prices for canola and rapeseed will be supported by the Statistics Canada report, which will be released on December 5, if the estimate of canola harvest is reduced from September 18.98 million tons to the market estimate of 17-18.5 million tons.

Tags: Ukraine, prices, rapeseed