News about possible rapeseed supplies from Ukraine to Canada has blown up prices for rapeseed and rapeseed

The shortage of canola and the news about plans to import rapeseed from Ukraine to Canada in August led to a sharp increase in prices for canola and rapeseed on the world market.

The dry weather prevailing in Canada in recent months increases concerns about the fate of the future crop, which leads to higher prices.

Yesterday, may canola futures at Chicago SWOT rose 4.2% to 865 CAD/ton, or 6 692/ton, adding 17% in just two weeks on the back of declining stocks due to active canola exports. At the same time, November futures rose only 2.5% to 578 CAD/ton or 4 462.2/ton against the background of intentions to expand the sowing area, adding 7% in price in two weeks.

This year, Canada increased canola exports by 21% compared to the corresponding period of the previous season to 8.3 million tons. according to USDA experts, in 2020/21 MG, Canadian canola exports will reach 10.7 million tons, which is 7% higher than last year's figure and 4% higher than the 5 - year average.

Due to active exports, the final reserves in the 2020/21 season will decrease to 700 thousand tons compared to 2.4 million tons a year ago.

Due to the shortage of canola observed in the Canadian market, prices in the physical market increased to 6 690-730/ton, depending on the delivery date. Therefore, an international trading company for its own processing plant purchased two vessels of cheap Ukrainian rapeseed of the new crop for delivery in August at a price of 5 530-540/ton, which led to an explosive jump in prices in Ukraine and Canada.

May rapeseed futures on Paris Euronext rose by €38.5/ton to €547.5/ton or €658/ton from Monday, and August – by €8/ton to € 496.25/ton or € 597/ton, adding 13% and 11.5% in price in two weeks, respectively.

Following them, forward prices for rapeseed in Ukraine increased from 5 520/ton to 5 575-580/ton for deliveries to the port in July – August.

In the period from July 1 to April 4, EU countries imported 5.25 million tons of rapeseed (including 2.3 million tons from Ukraine), which is 7% higher than 4.9 million tons in the same period of the previous season.

According to forecasts, in 2021, canola production in Canada will grow by 5-7% to 20 million tons due to an increase in sowing areas. However, forecasts of dry and frosty weather against the background of low soil moisture reserves continue to reduce yield estimates.

For Ukraine and the EU, rapeseed crop forecasts remain at last year's level, although some experts expect a slight decline in production, which increases the impact on prices.