Forward rapeseed prices in Ukraine began to decline under pressure from a drop in canola and rapeseed quotes by 4.7 and 3.2% per week

Favorable May weather for rapeseed crops in the EU and Ukraine and canola in Canada and falling oil prices are increasing pressure on biodiesel prices, especially against the backdrop of information that the US authorities will not support the increase in the biodiesel production mandate in the US in 2026, expected by producers.

In Ukraine, abundant May rains improved the condition of rapeseed crops, which produced additional pods and bloomed again, which may increase yield, but on the other hand may cause the upper and lower tiers of pods to ripen at different times, which will reduce the quality and oil content.

During the week, traders lowered forward prices for rapeseed by $5-10/t to $495-515/t for July deliveries to Black Sea ports, given the active fall in prices on exchanges last week.

In Canada, 82-88% of the area has already been sown with canola by the end of May, the weather is conducive to the development of crops, and the processing rate has decreased over the month, which has increased pressure on the prices of the old and new harvest.

July canola futures fell 4.7% to CAD 687/t or $ 500/t (-2.2% month-on-month), and November new crop futures fell 3% to CAD 668/t (+1.7% month-on-month).

According to Oil World, in April, canola processing in Canada decreased by 10% compared to March from 1.025 to 0.92 million tonnes, which is 4% lower than the indicator of April last year (0.96 million tonnes). This is due to the decrease in domestic canola stocks and a sharp drop in canola meal exports to China and rapeseed oil to the USA. Since the beginning of the season (August-April), 8.76 million tonnes of canola have been processed in Canada compared to 8.33 million tonnes last year.

August rapeseed futures on the Paris exchange fell 3.2% to €473.25/t or $540/t (+0.3% month-on-month) over the week amid improving weather in Germany.

Oil prices remain under pressure from fundamental factors of increasing supply and falling demand (against the backdrop of new tensions between the US and China), so they will continue to decline, despite speculative jumps caused by the spectacular strike by Ukrainian drones on Russian military airfields. Therefore, biofuel prices will also be under pressure from falling oil prices.

If weather conditions in Canada, Ukraine, the EU and Russia remain favorable in the first half of June, then rapeseed prices will continue to fall under the pressure of increasing soybean supply and declining world prices for meals, feed grains and oils.

Tags: Ukraine, prices, rapeseed