Speculative growth in canola prices continues despite increased production forecast in Australia

Speculative growth in rapeseed prices, caused by a shortage of physical supplies, continues on European exchanges. Against the background of significant volumes sold on the exchange, quotes rose by 2.6% yesterday, almost reversing the decline of the previous week.

February rapeseed futures on the Paris MATIF rose 2.5% to €527.25/t or $554/t yesterday, up 7% in 4 sessions after falling 10% earlier. So far, quotes haven't reacted to increased forecasts for Australia's canola crop.

The ABARES agency has raised its forecast for Australian canola production in FY 2024/25 by 0.1 to 5.6 million tons, which will exceed the 2023/24 FY crop by 8% and the 10-year average by 10%.

Canadian canola futures remain under pressure from low US soybean and soybean oil prices, but are gradually rising following EU canola quotes.

January canola futures on the Winnipeg exchange rose 3.9% in 4 sessions to CAD 587/t or $417/t, down 10% from the previous month.

Canola exports from Canada are slowing. So far, it has reached 3.7 million tons, which is 90% higher than the corresponding indicator of the previous season, although in the first months of the season the export rate was three times higher than last year.

In 2024//25 MR, the European Union increased the import of rapeseed by 8% compared to the previous season to 2.4 million tons, of which 70.6% was delivered from Ukraine.

In Ukraine, buying prices for rapeseed in Black Sea ports fell from UAH 26,000 to UAH 24,000/t last week, but have risen to UAH 25,000/t or $530/t this week as traders try to buy the remaining stocks on the market.

In 2024/25, Ukraine exported 2.63 million tons of rapeseed out of the projected 3 million tons, in particular, 330,000 tons in November. Farmers should accelerate the sale of leftovers at high prices, as prices may fall in the second half of the season on the forecast of a good harvest next season.

According to new estimates by the International Grains Council (IGC), in 2025/26, the global rapeseed area will grow by 1.4% compared to the current season to a record 44.1 million hectares.