Low canola planting rates in Canada support canola prices in the EU

Cold and wet weather in Canada is delaying canola planting, supporting canola and canola exchange prices, although rainfall in Australia is improving prospects for the upcoming canola crop.

 

As of May 20, Saskatchewan had 56% of its planned acreage planted with canola, and Alberta had 58% of its acreage planted, compared to 68% and 62% planted at this time last year, respectively.

 

Cyclones will bring another wave of rain to the Canadian prairies next week, replenishing soil moisture but slowing seeding.

 

On the Winnipeg exchange this week, July canola futures rose 0.9% to CAD 672/t or $489/t (+8.7% on the month), while November futures rose 0.7% to CAD 693/t t or $505/t (+9.1% for the month, +12.7% for the year).

 

An acceleration in US soybean plantings is pushing down soybean prices, adding pressure to canola prices, especially amid strong old-crop stocks and an increase in Canadian plantings.

 

Additional support for rapeseed prices was added by MARS experts in the May report of the fall of the forecast of the yield of rapeseed in the EU in comparison with the estimates of April from 3.26 to 3.21 t/ha, which will exceed last year's 3.18 t/ha.

 

On the MATIF exchange in Paris, August rapeseed futures last week reached the highest level since March 2023 at €495/t, but then fell to €492.5/t or $532/t (+0.9% for the week, + 5.9% per month, +18% per year).

 

In the 2023/24 FY as of May 3, the EU imported only 4.9 million tons of rapeseed, which is 38% less than the corresponding indicator of the 2022/23 FY.

 

This week, Ukraine received light rains, albeit patchy, which will improve crop condition and yield potential, especially against the backdrop of moderate temperatures that will prevail for several more weeks. Experts believe that rapeseed harvesting will begin 2 weeks earlier than usual in the south of the country - already from June 8-15, which will significantly increase the supply on the EU market.

 

Export prices for new crop rape rose to $430-450/t with delivery to Black Sea ports and €460-470/t with delivery to Germany in August-September.

 

Rain in Australia's main canola growing regions is improving crop prospects, so farmers will not be reducing acreage under canola in favor of wheat or barley. Canola planting data in Canada and Australia will have a significant impact on quotes in the coming weeks.