Rapeseed prices support forecasts of a reduced crop in the EU and rising oil prices
June Brent crude oil futures rose 4% for the week to a 5.5-month high of $89/barrel amid Ukrainian drone attacks on an oil refinery in Tatarstan and an Israeli strike on an Iranian general in Syria. Such news leads to a speculative rise in oil prices, which supports quotations for vegetable oils used in the production of biodiesel.
The agency Strategie Grains lowered its forecast for rapeseed production in the EU in 2024 from 18.3 to 18.1 million tons, which would be 10% less than last year's 19.9 million tons, due to a lower than expected harvest in France. To compensate for the reduction in production, the EU will increase imports of rapeseed from Ukraine and Australia in the 2024/25 FY.
At the same time, the agency's experts left the forecast for sunflower production in the EU in 2024 at the level of 10.7 million tons (which will exceed the 2023 harvest by 10%), and soybeans at the level of 3.1 million tons (9% more than last year).
August new-harvest canola futures on the MATIF exchange rose 1.5% yesterday to €452/t or $487/t (+8.7% on the month), while May futures rose 1.7% to 445, €75/t or $480/t (+6.8% m/m) as they remain under pressure from low soybean prices due to a bumper crop in South America.
May canola futures on the Winnipeg exchange last week fell 2.4% to CAD 635/t, or $468/t, adding 6.5% for the month amid rising MATIF quotes. Canola prices are being supported by a lack of rainfall in some parts of Canada, with November new crop canola futures trading CAD20/t higher than May.
In Ukraine, rapeseed prices for delivery to Black Sea ports rose to UAH 17,000/t, and in the western regions for EXW-elevator for rail deliveries to Germany - to UAH 15,500-16,000/t against the background of the increase in the interbank dollar exchange rate.
Polish "farmers" continue to block Ukraine's border with Poland, which keeps rapeseed prices in the EU at a high level, although rapeseed stocks in Ukraine are almost exhausted.
