Canada can increase the production of canola in the new season

2019-03-20 12:08:34
Canada can increase the production of canola in the new season

After the reduction of the forecast harvest of rapeseed in the EU, traders drew attention to Canada, which can increase the production of canola and to compensate for the reduction of world production.

 

According to the forecast of experts of the USDA, in 2019/20 Mr Canada will gather to 20.5 million tonnes of canola compared to 20.3 million tonnes in 2018/19 Mr and 21.3 million tonnes in 2017/18 MG. The yield increases due to expansion of acreage under Canalou 1% to 9.3 million hectares due to the reduction of areas under legume crops, due to a reduction in demand for them from India.

 

the structure of sown areas can affect the strained relations between Canada and China, which is a major buyer of canola oil and the refusal of China from buying some batches of canola. Further disputes may lead to redistribution of the market of rapeseed and canola, as happened last year with the soybean market, when political relations have led to a drop in soybean prices in the U.S. and growth in Brazil.

 

the European Union, which is the largest producer of rapeseed, after last year's drought has reduced the area under winter rapeseeds, resulting in the production of oilseeds in 2019, according to estimates by Oil World, will decrease to 18.7 million tons, compared with 19.5 million tons in 2018 and 22 million tons on average for 5 years. In particular, France has reduced the acreage of rapeseed by 23%, Germany – 29%, Romania – 16%.

 

Reduction of rapeseed production in EU last season, marginally increased its imports since some plant switched to processing of cheap soybeans from the United States. As a result, the price of rapeseed on Euronext fell from 385/ton in the beginning of the season to 356/ton for deliveries in may and 358,75/t in August.

 

During July-January 2018/19 MG EU imported 11.8 million MT of oilseeds, which is 15% larger than the value from the previous season. Imports of soybeans grew by 16% to 8.7 million tons, rape – by 14% to 2.8 million tonnes, the Main supplier of rapeseed in the EU is the Ukraine, which is in the absence of GMOs in products. But after last year's import permit, GMO soybeans from the United States, there is a probability that in the new season, the EU will allow the import of GMO canola from Canada.

 

the price of canola for the year fell from 539 CAD/MT to 464 CAD/t or 348 $/ton, after the disputes with China was the main drop and with Feb price has lost 4%.

 

the Forward price of rapeseed in Ukraine reduced after the world and now for August delivery at the port offer 390 $/t, while a month ago prices were at the level of the 400-410 $/t