Increased EU and Australian rapeseed crop forecasts are putting pressure on prices

This year's weather is helping to produce a good crop of canola in the EU and canola in Australia and Canada, and as seasonal supply increases, pressure on prices will intensify.

Stratégie Grains experts, thanks to the expansion of the sowing area, increased the forecast of rapeseed production in the EU in 2022/23 MR to 18.5 million tons, which will exceed last year's harvest by 9%. At the same time, as a result of the drought in Italy, Romania and Hungary, the forecast for sunflower production in the EU was reduced by 0.5 million tons compared to July estimates to 10.4 million tons (corresponding to last year's figure), and soybean production by 0.2 million tons to 2. 8 million tons (by 3% will exceed the indicator of 2021/22 MR).

The Australian Oilseeds Federation (AOF) predicts that the country will harvest the second largest canola crop in 2021/22 at 5.5 million tonnes, which will exceed the 5-year average, although it will be inferior to last year's record 6.3 million tonnes. canola plantings in Australia in 2021/22 MR increased compared to the previous season by 455 thousand hectares to a record 3.425 million hectares.

The decrease in canola production in Australia compared to the previous season is due to less rainfall in the January-June period, which negatively affected the progress of sowing and the condition of oilseed crops. At the same time, rainfall forecasted for July-August in the main regions of canola producers in Australia will allow to improve crop forecasts.

In Canada, weather with abundant precipitation and mild temperatures favors canola and plant growth. In some areas, there is a moisture deficit, but this will not significantly affect the harvest, which is forecast at 20 million tons compared to 12.6 million tons last year.

Harvesting of winter rapeseed continues in Ukraine, and as of July 28, 1.8 million tons have already been threshed from 702 thousand hectares or 61% of the area, which allows us to hope for the forecasted 2.8-3 million tons.

Increasing the pace of harvesting in Ukraine and the EU will increase the pressure on quotations, and from September, when Canadian canola will enter the market and soybeans will be harvested in the USA, quotations may fall sharply. Therefore, it is worth selling canola before the start of the canola harvest from Canada in September and from Australia in December.