Uncertainty about the new harvest is holding back rapeseed sales and leading to rising quotes

Near-term rapeseed and canola quotes continue to rise amid restrained sales in the physical market, while the new crop is trading significantly cheaper on expectations of negative consequences of the US tariff war.

May canola futures have recovered from a drop in the first half of March and have risen 15.8% to CAD 660/t or $ 476/t during the month, amid Trump’s postponement of tariffs and a sharp increase in soybean oil prices in the US. November canola futures are trading at a high of CAD 648/t due to uncertainty over Canadian plantings, which farmers may reduce due to the tariff war between the US and China.

With the euro and Canadian dollar strengthening against the US dollar by 3-5% in recent weeks, May canola futures are trading $129/t cheaper than rapeseed futures in Paris.

Due to low supply from local farmers and a slowdown in imports, May rapeseed futures in Paris rose 13.9% in one month to €533.25/t or $605/t, recovering to the level of early March, which preceded the imposition of tariffs and the subsequent collapse of quotes by 14%. At the same time, August rapeseed futures for the new crop rose only 2.6% in one month to €469/t, and are trading €64/t cheaper than the old crop, against the backdrop of forecasts of increased production in the EU and falling prices and demand for oil and biodiesel.

According to estimates by the Federal Office for Economic Affairs and Export Control (BAFA), in 2024, the consumption of biodiesel and hydrogenated vegetable oil (HVO) in Germany decreased by 20.6% compared to the previous year to 2.1 million tons.

The projected increase in rapeseed and canola yields in the new season in the EU and Australia will offset a possible decrease in rapeseed yields in Ukraine and the UK, but the main focus is now on the forecasts for canola production in Canada.

Australia in MY 2025/26 may increase canola production by 3.5% to 6.15 million tons due to a slight expansion of sowing areas and improved yields.

According to forecasts by the Foreign Agricultural Service (FAS) of the US Department of Agriculture, the United Kingdom will reduce rapeseed production to 720 thousand tons in MY 2025/26 (824 thousand tons in MY 2024/25 and 1.2 million tons in MY 2023/24) due to a sharp decrease in sowing areas to 240 thousand hectares (391 thousand hectares in 2023/24 and 293 thousand hectares in MY 2024/25).

In the midst of the US trade war with most countries in the world and almost daily changes in tariff rates, canola prices on the Intercontinental Exchange remained fairly stable between April 3 and 9.

After China imposed a 100% tariff on Canadian rapeseed meal and oil, and the US announced a 25% tariff on goods from Canada, it is difficult to predict how Canadian farmers will behave and how much they will reduce canola planting areas, especially since weather conditions with large moisture reserves are conducive to planting.

Tags: Ukraine, prices, rapeseed