Heat in Europe supports growth in rapeseed prices

Weather conditions in major rapeseed producing countries have become the main factor determining the dynamics of the global market. After a sharp drop in oil prices to levels that preceded the escalation of the conflict between the US and Iran, it is weather risks that are now forming a speculative premium in rapeseed prices.

Western Europe has been hit by a second wave of abnormal heat this week, with temperatures of 35-42°C, which could reduce yield potential and oil content in rapeseed. The biggest impact is expected in France, the largest rapeseed producer in the European Union.

In the 2026/27 season, the area under rapeseed in France increased by 6.5-8% to 1.35 million hectares. However, due to the expected decrease in yield, the gross harvest is forecast at 4.2-4.5 million tons, which is practically in line with the result of 2025.

European analytical agencies MARS and Expana (formerly Stratégie Grains) previously forecast the average rapeseed yield in France at 3.1–3.2 t/ha, which corresponds to the long-term average, but is inferior to the record results of 2025. At the same time, a new wave of extreme heat in the final stage of crop development may lead to further revisions to yield forecasts.

Analyst firm Expana has already lowered its forecast for European Union rapeseed production in the 2026/27 season to 20.3 million tonnes in a June report, down from 20.6 million tonnes in its May estimate. For comparison, production in the previous season was around 20 million tonnes.

Against this background, August rapeseed futures on the Euronext exchange in Paris have increased by 2.9% since the beginning of the week to €518.75/t or $590/t. At the same time, November contracts are trading about €5/t more expensive, which indicates market expectations that the tense situation with the supply of the new crop will remain.

The market was further supported by the worsening situation around the Strait of Hormuz. After new reports of Iran shelling a civilian vessel, the movement of ships through the strait became more difficult again. In addition, official Tehran stated that all ships must pass through the strait under the control of the Iranian side. Against this background, Brent oil prices resumed growth by 1.5% – to $ 75 / barrel, which traditionally supports the market for vegetable oils and rapeseed.

According to the WSJ, Iran is also considering the possibility of introducing a fee for passing through the Strait of Hormuz and has already created its own insurance company, the services of which, according to Tehran, shipowners should use. Such steps could maintain geopolitical uncertainty in the oil market for a long time, and the risk of a new escalation after July 4 remains quite high.

A heat wave with temperatures of 30–36°C is expected in Ukraine starting Sunday. This could also negatively affect the formation of rapeseed yields, although precipitation forecast for Wednesday-Thursday should reduce temperature stress for crops.

On the domestic market, forward prices for new crop rapeseed remain within the range of $550–570/t with delivery to Black Sea ports. Processing companies are currently announcing purchase prices at the level of UAH 25,500–26,500/t ($500–520/t excluding VAT) with delivery to the plant. At the same time, processors still have the opportunity to increase purchase prices if competition for raw materials intensifies at the start of the season.

Unlike Europe, weather conditions in Canada remain favorable for the development of canola crops, so quotes on the ICE exchange in Winnipeg are practically unchanged and are held near 735 CAD/t or $519/t.

In Australia, recent rainfall in the east of the country has also improved the condition of canola crops and somewhat alleviated concerns about the future harvest. At the same time, the key factor for the market will remain the amount of rainfall in September-October, when the main crop formation will take place after the winter period.

Tags: EU, prices, rapeseed