Sharp rise in oil prices supports rapeseed and canola prices

The speculative rise in oil prices supported prices for rapeseed and canola, although to a lesser extent than analysts had expected.

Over the past three sessions, October futures for Brent crude oil have risen by 7.1% to $81.4 per barrel (+3% for the month) amid a possible escalation of the situation in the Middle East and mutual attacks between Israel and Lebanese Hezbollah.

Amid rising oil prices and a strike by railroad workers in Canada, November canola futures on the Winnipeg Stock Exchange rose 4.4% to 590 CAD/t or $437.7/t in three sessions (+2.8% per week, -7.6% per month).

Dry and warm weather in the prairies of Canada in the coming weeks will accelerate the harvest, which will increase the supply on the market.

Following the prices of canola, November futures for rapeseed on the stock exchange in Paris for two sessions increased by 2.3% to 460 €/t or 513,7 $/t (+1.5% for the week, -4.3% for the month).

In Ukraine, the purchase price of rapeseed this week rose to 22200-22500 UAH/t or 470-475 $/t with delivery to the ports of the black sea, but farmers are holding back sales amid rising prices of sunflower due to a strong reduction in the harvest.

By the end of August, the export of rapeseed from Ukraine will reach 1.3 million tons, and free for export will remain another 1.5 million tons of the 3.4 million tons harvested this year, as domestic processing will not exceed 400 thousand tons of rapeseed.

Another factor supporting prices, which European traders are not taking into account yet, is the abnormally dry weather in Ukraine, which will not allow farmers to sow winter rapeseed on the planned areas in the optimal time. In addition, some of the already planted rapeseed may be lost.

Therefore, after September 10 (the end of the optimal rapeseed sowing period), farmers will further reduce rapeseed sales in anticipation of the results of the sowing season in Ukraine and the EU.

Tags: prices, rapeseed