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

Strategie Grains experts increased the forecast of rapeseed production in the EU in 2023/24 MY by 0.6 million tons compared to previous estimates from 18.9 to 19.5 million tons (19.4 million tons in 2022/23 MY) due to better, than expected to harvests in Romania, Germany, Spain, Italy and the Baltic states.

At the same time, the forecast for sunflower production in the EU in 2023/24 was reduced by 0.2 to 10.1 million tons (9.3 million tons last year), and for soybeans to 2.9 million tons (2.5 million tons last year).

On the Paris MATIF, November rapeseed futures for September traded in the range of €440-445/t, and since Monday rose by 1% to €447.25/t or $468/t (-5.1% for the month). The euro's decline against the dollar to €1.046/$ is supporting euro prices, but overall declines in Canadian canola and US soybean prices are adding pressure to canola quotes. Although they may soon be supported by unfavorable conditions for the development of rapeseed crops in Ukraine.

November canola futures in Winnipeg fell 13% on the month to CAD717.5/t or $524/t (-20% y-o-y) amid dry and warm weather that helped harvest and minimize losses. But even at this price level, Canadian canola cannot compete on the EU market with rapeseed from Ukraine and Australia.

Cheap Ukrainian rapeseed puts pressure on prices within the EU, but the pace of its import has decreased significantly against the background of the ban on supplies to EU countries neighboring Ukraine. As of September 26, EU countries imported 826,000 tons of rapeseed (41% less than last year), of which 51% or 422,000 tons came from Ukraine. In 2023/24, Ukraine plans to export 4 million tons of rapeseed, which increases the pressure on European prices.

According to the European Commission, at the end of September, Ukrainian rapeseed prices were $360/t FOB Black Sea compared to $462/t FOB Rouen (France), $525/t FOB Australia and $562/t FOB Canada. Physical survey prices for Ukrainian rapeseed are 390-400 €/t with delivery no earlier than December-January to Baltic ports and factories in Germany.

In Ukraine, as of October 2, 1.087 million hectares or 87.7% of the forecast were sown with winter rapeseed. Dry and warm weather negatively affects crops. September 2023 became the warmest in the last 142 years, as the average monthly temperature exceeded the norm by 3.9 ^o C, and there was almost no precipitation.