Rapeseed and canola prices continue to rise amid rising oil prices and declining harvest forecasts

A speculative 9% increase in oil prices in a week due to Israel’s open war with Iran is supporting biodiesel, rapeseed, and canola prices, especially given the reduced harvest forecast in Australia and new ideas to limit rapeseed exports from Ukraine.

Information about the US authorities’ intentions to sharply increase the mandate for biodiesel production in the US in 2026 and 2027, but only for production from local oil, upset Canadian rapeseed oil exporters and led to a sharp increase in soybean oil prices in Chicago by 15.8% in a week to $1,211/t.

Canada continues to experience cool, rainy weather, which is conducive to the development of canola crops, although precipitation is less than forecast.

July canola futures rose 4.6% to CAD 743/t or $ 547/t (+3.5% month-on-month), and November new crop futures rose 6% to CAD 736/t (+8.2% month-on-month) amid rising oil prices.

It is worth noting that August rapeseed futures on the Paris stock exchange have remained virtually unchanged over the week, trading at €489/t or $565/t (+1% month-on-month) due to forecasts of a good harvest in the EU and low demand for biodiesel and oil, while the price difference between rapeseed and canola has decreased to $18/t, which is the smallest spread since the beginning of the season.

In Ukraine, the weather is conducive to rapeseed loading, but exporters are actively raising forward prices for rapeseed against the backdrop of forecasts of a reduced harvest.

During the week, traders increased forward prices for July rapeseed deliveries to Black Sea ports by $5-10/t to $520-530/t.

This week, the Ukrainian parliament will consider a proposal to introduce a 10% duty on soybean and rapeseed exports, which will also be a factor in supporting rapeseed prices in Paris, while reducing export demand prices in Ukraine.

The Australian Agricultural Research Service (ABARES), amid a reduction in rapeseed sowing areas to 3.4 million hectares and deterioration in yields due to prolonged drought, has lowered its rapeseed production forecast for MY 2025/26 to 5.7 million tons (6.1 million tons in MY 2024/25), while the USDA estimates it at 6.15 million tons and the IGC at 6 million tons. The soil moisture level in most regions is significantly lower than last year, which negatively affects crop development and yield.

Tags: prices, rapeseed