Uncertainty of the harvest in Europe and Australia supports the prices of rapeseed in the EU, but they will be limited by cheap canola from Canada

Amid Ukrainian UAV attacks on refineries in Tatarstan and Israel’s strike on an Iranian general of the IRGC in Syria, June futures for Brent crude rose 4% over the week to a 5.5-month high of $89/barrel, which supported prices for vegetable oils used in biodiesel production.

On the MATIF exchange, the may futures for rapeseed during the week traded in different ways, but stabilized at 450 €/t, while the August futures for the new harvest in April rose 3.5% to 461 €/t or 495 $/t (+8.9% for the month) amid uncertainty with the new crop.

In Romania and Bulgaria, rapeseed bloomed 2-3 weeks earlier than usual, as the autumn moisture deficit affected the development of plants. Dry spring weather worsens the harvest prospects, which supports the quotes. Recall that the experts of Strategie Grains due to the reduction of sowing areas in France lowered the forecast of rapeseed production in the EU in 2024 from 18.3 to 18.1 mln tonnes, which is 10% lower than last year’s 19.9 mln tonnes.

According to Reuters, Australia in 2024/25 MY will increase the area under wheat and barley due to favorable weather and high demand from China, while reduce the area under canola due to lower profitability of cultivation and dry conditions in the regions of canola growing – in the West of the country, which will reduce the canola crop by 0.7-1 million tons to 4.6-5 million tons.

However, FAS USDA forecasts that in 2024/25 MY canola production in Australia will increase by 14% compared to the previous season to 6.5 mln tonnes (which will be the 3rd highest in history) due to better prices for canola than for wheat and barley.

Traders will closely monitor the sowing of canola in Australia and Canada, as a good harvest in these countries will increase imports to the EU in case of reduction of domestic production.
India in 2024/25 MG will also increase the production of canola compared to the previous season from 12 to 12.3 million tons, – predicts FAS USDA.

May Futures on canola on the stock exchange in Winnipeg in April rose by only 0.8% to 639 CAD/t or 467 $/t (+3.7% per month) amid slow exports. Competitive prices for canola will increase its supply to the EU, which will restrain the growth of prices for rapeseed in Europe.

Spot demand prices for rapeseed for delivery to the Czech Republic and Germany remain at 415-430 €/t, as the processors have accumulated sufficient stocks. Despite the restraint of sales by EU farmers, prices at the end of the season may decline amid increasing supplies from Canada.

In Ukraine, rapeseed prices remain at 360-380 $/t or 17000 UAH/t with delivery to the Black Sea ports, but traders are completing their purchase programs, so producers who still have residuals of rapeseed need to speed up sales. the Demand for the supply of rapeseed by road to Europe is almost absent due to the high cost of logistics, as the cars for 20 days or more are in line at the border.

In the new season, amid the blockade of the border with Poland, Ukraine will increase exports of rapeseed by sea, including to Europe, and reduce road and rail transit through Poland to minimize risks.

Tags: Australia, Bulgaria, Romania, EU, Poland, Canada, India, rapeseed, Germany, Czech Republic