An increase in the forecast for the EU rape harvest increases the pressure on prices

A record canola crop is expected around the world this year, so another increase in the production forecast for the EU has put further pressure on prices, which have already fallen by 30% in three months, although they are still 6.8% above last year's level.

Thanks to the better-than-expected yield, Strategie Grains experts increased the forecast for rapeseed production in the EU from 18.47 to 19.15 million tons, which will exceed last year's 17 million tons by 12.7%. The import forecast was also increased against the background of increased supplies from Ukraine across the western borders.

In August, compared to July, Ukraine increased its export of rapeseed 7 times from 90.5 to 624.5 thousand tons, and in September - October it will accelerate deliveries in order to ship the forecasted 2.6-2.8 million tons for the season. At the same time, soybean exports in August decreased compared to July from 141.5 to 128.4 thousand tons, and sunflower - from 362.1 to 153.9 thousand tons.

The EU rapeseed balance in FY 2022/23 will be balanced, and supply will exceed demand, especially against the background of increased supplies from Ukraine and canola from Canada and Australia in September-December.

November futures on the Paris MATIF remained flat at €612.5/t or $609.25/t yesterday, down 1.3% for the week, compared with €573.75/t or $681.5/t last year. t.

A fall in the euro lowers the dollar price, which lowers purchase prices in Ukraine, and later increases the pressure on the price of canola in Canada.

The canola market will support the decision by Canada and China to suspend the dispute at the WTO on the measures introduced by the PRC against the import of Canadian canola, which will allow the resumption of canola supplies to China.

In Ukraine, the purchase prices for rapeseed for deliveries to the port of Odesa or Chornomorsk rose to UAH 16,700-16,800/t or $475-480/t, while last year they were UAH 20,000-20,500/t or $670-680/t. At the same time, demand prices for supplies to DAP Poland, Romania and Bulgaria remain at the level of $550-560/t due to a reduction in demand against the background of an increase in local production offers.

Rapeseed prices in the current season will support the strained balances of sunflower and soybeans in the EU. Strategie Grains experts reduced the forecast of the sunflower harvest in the EU by 1.2 million tons to 9.17 million tons, and soybeans - by 0.29 million tons to 2.49 million tons, which is by 11.3% and 7.3%, respectively will be inferior to last year's indicators.