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

The European monitoring agency MARS in a new report raised estimates of rapeseed and wheat yields in EU countries, which increased the pressure on quotations.

Experts believe that the rains have increased moisture reserves to a favorable level for this time of year, so the prospects for the harvest are generally good, with the exception of the countries of the Iberian Peninsula.

Compared to the previous report, the estimate of rapeseed yield in the EU has been increased from 3.31 to 3.34 t/ha, which will exceed the 5-year average by 8%. The estimate of the yield of soft wheat, which is the main grain crop of the EU, has been increased from 5.96 to 6 t/ha, which will exceed last year's and the average 5-year indicator by 4%. At the same time, the estimate of the yield of barley in the EU was reduced from 4.92 to 4.89 t/ha, and corn - from 7.67 to 7.64 t/ha.

August rapeseed futures on the Euronext exchange have been falling in price for more than a month, and have lost 16.8% during this time, falling to the lowest level since April 2021 at €393.25/t or $424/t.

Meanwhile, July canola futures on the Winnipeg exchange fell just 3.6% to CAD 702/t or $520/t for the month amid delayed canola planting in Canada and forecasts of a 5.7% increase in domestic canola processing million tons or 50% to 16.8 million tons by 2025-2026.

The Canadian Oilseeds Association estimates that the North American biofuel industry will increase canola consumption to 6.5 million tons by 2030, compared to 1.8 million tons in 2020.

Forward prices for rapeseed of the new harvest with delivery to the EU are 360-380 €/t DAP, whereas in Ukraine, traders offer $310-330/t for deliveries to the ports of the Danube or the Black Sea.

Markets remain under pressure from old-crop stocks and the approaching harvest of the new crop, but prices may be affected by final Canadian planting data and an expected decline in the Australian harvest.