Canola harvest delay in Canada supports canola prices
Rapeseed and canola prices fell sharply from early September in anticipation of increased supply from Canada, but began to recover in the middle of the month amid delayed harvests. Quotations were pressured by forecasts of a large harvest, but now the question has arisen – whether farmers will have time to collect it before the onset of frost.
In the province of Saskatchewan (the largest producer of canola) on September 26, canola was harvested on 66% of the area, in Alberta on September 20 – on 53.5% of the area, in Manitoba on September 27 – on 30% of the area. The weather in September was dry and warm, so the reason for the delay in harvesting is unclear. According to forecasts, dry weather will prevail in the prairies for 5-7 days, which will allow to speed up harvesting, but usually after October 5-15, temperatures there will drop and snow will fall.
November canola futures on the Winnipeg exchange rose 7.5% over the past two weeks to CAD 852/t or $621/t (+0.8% on the month), albeit in part thanks to a weaker Canadian dollar against American during this period by 3.5%. On Wednesday, 39,811 contracts for canola were sold on the exchange, and on Thursday already 49,576, which indicates the expectation of further price growth supported by weather factors. The stock exchange will be closed today due to the national holiday.
November rapeseed futures on the Paris MATIF followed the canola market by 6% in two weeks to €611.75/t (-1.5% for the month) or $600/t. The euro exchange rate, after collapsing to $0.96/€, has already recovered to $0.96/€. The quotation also supports the increase in the price of Canadian canola to a level that exceeds the price of European canola, as well as the escalation of the war in Ukraine by the Russian Federation and the threat to stop the operation of the “grain corridors”.
In Ukraine, the purchase price for rapeseed in the Black Sea ports at the end of the week fell to UAH 17,000-17,200/t or $465-475/t against the background of increased offers and uncertainty with exports in November-December. Some traders have already purchased the required lots and closed the purchase program for the current season, others are waiting to see how the situation will develop after the announcement by the President of the Russian Federation of the “independence” of the occupied Kherson and Zaporizhzhia regions of Ukraine and plans to join them to the Russian Federation.
The President of Ukraine and the Secretary General of the UN discussed the prospects of the grain corridor, and the President of Turkey supported the extension of its operation after November 20. Against the background of damage to the Nord Streams and plans to limit the price of Russian oil, the Russian Federation will not be able to refuse to export its record crop of grain, so as not to collapse its economy, so it will be forced to extend the agreement on the sea export of grain from Ukraine.
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