Following the prices of rapeseed, rapeseed prices in Ukraine and Europe fell
Against the background of rain in the Canadian Prairies yesterday, canola quotes fell by 5.8%, but at the end of trading, after clarifying precipitation data, November futures recovered to 874.4 CAD/t or 6 695/t, showing a daily drop of 4%.
Following canola prices, August rapeseed futures on the Euronext exchange fell another €11.5/ton yesterday to €523.75/ton or € 617.8/ton, losing 4.7% of the price over the week.
Forecasts for rapeseed production in the EU remain almost at last year's level, so imports will also amount to approximately 6.2-6.5 million tons. it is not yet known where another 2 million tons of rapeseed will be purchased, if canola prices are now 7 70-80/ton higher than rapeseed, and exports from Canada will be under threat.
In my 2020/21, the European Union increased rapeseed imports by 8% compared to the previous season to 6.5 million tons, of which 2.19 million tons (33.7%) were supplied from Ukraine, 2.08 million tons (32.1%) – from Canada, 1.97 million tons (30.3%) – from Australia.
The rains that took place this week in canola and spring wheat growing areas in Canada were not enough to reduce the state of drought. The air temperature dropped to normal primarily due to cloud cover and haze from forest fires last week in the northern regions.
In the province of Saskatchewan, which is the main producer of canola, the condition of crops continues to deteriorate and is currently assessed as poor or average. Hot and dry weather accelerated the development of crops that bloomed at high temperatures, which led to a decrease in yield potential.
Moisture reserves in the upper layer of the soil are estimated as sufficient – 14%, insufficient – 41%, very poor – 45%. Only heavy and prolonged rains will be able to improve the condition of crops, but according to forecasts, only light precipitation will pass in the coming days, although the temperature will drop to 20-25 OhC will reduce stress for plants.
The updated report on the state of crops, which will be released on July 27, will significantly correct production forecasts for the current season.
For Ukraine, rapeseed production and export forecasts remain at last year's level of 2.6-2.8 million tons and 2.3-2.4 million tons, respectively, due to a reduction in sowing areas and an increase in average yield.
Rising rapeseed prices have boosted sales from producers, but falling prices and heavy rains this week, which delayed harvesting, will again reduce supply, so traders will be forced to raise prices to fulfill July contracts.