A sharp rise in oil prices is supporting canola and canola prices

Speculative gains in oil prices supported canola and canola, albeit to a lesser extent than analysts had expected.

 

October Brent oil futures for the last three sessions rose by 7.1% to $81.4/barrel (+3% for the month) against the backdrop of a possible escalation of the situation in the Middle East and mutual attacks between Israel and the Lebanese Hezbollah.

 

November canola futures on the Winnipeg exchange rose 4.4% in three sessions to CAD 590/t or $437.7/t (+2.8% on the week) amid rising oil prices and a Canadian rail strike , -7.6% for the month).

 

Dry and warm weather in the Canadian prairies in the coming weeks will accelerate the harvest, which will increase the supply in the market.

 

Following canola prices, November canola futures on the Paris Stock Exchange rose 2.3% in two sessions to €460/t or $513.7/t (+1.5% for the week, -4.3% per month).

 

In Ukraine, rapeseed purchase prices this week rose to UAH 22,200-22,500/t, or $470-475/t, delivered to Black Sea ports, but farmers are holding back sales amid rising sunflower prices due to a severe crop cut.

 

By the end of August, the export of rapeseed from Ukraine will reach 1.3 million tons, and another 1.5 million tons of the 3.4 million tons harvested this year will remain free for export, since domestic processing will not exceed 400,000 tons of rapeseed.

 

A factor supporting prices, which European traders do not yet take into account, is the abnormally dry weather in Ukraine, which will not allow farmers to sow the planned areas with winter rapeseed in the optimal time. In addition, part of the already sown rapeseed can be lost.

 

Therefore, after September 10 (the end of the optimal rapeseed sowing period), farmers will further reduce rapeseed sales in anticipation of the results of sowing in Ukraine and the EU.