Rapeseed prices continue to fall, despite reduced production forecasts

In the August report, USDA experts reduced the forecast of the world production of oil crops by 3.6 million tons to 663.7 million tons due to a decrease in the harvest of soybeans in the United States, rapeseed in Canada and sunflower in the EU, which will not be able to compensate for the increase in the harvest of rapeseed and sunflower in Ukraine and Russian Federation However, the volume of production will still exceed the figure of the previous season by 5.5%.

After growing by 55% last year, areas sown to canola and rapeseed increased by another 1.1% in FY 2023/24 to a record 42.26 million hectares, but gross harvest will be 2.9% below last year's figure.

Compared to the July estimates, the new rapeseed balance for the 2023/24 FY has undergone the following changes:

• The estimate of initial reserves was reduced by 0.53 to 6.81 million tons (4.19 million tons in FY 2022/23).
• The global production forecast was reduced by 1.35 to 86.07 million tons (88.54 million tons in FY 2022/23 and 75.3 million tons in FY 2021/22), in particular for Canada – by 1.3 to 19 (19 ) million tons
• The forecast of world consumption was reduced by 0.18 to 85.52 million tons, which will correspond to the level of 2022/23 MR.
• The import estimate has been reduced by 0.59 to 16.26 million tons, which will be 20% less than the 2022/23 MR indicator, as a result of a sharp reduction in supplies to the EU.
• The estimate of final reserves was reduced by 0.36 to 6.09 million tons, which will be 12.2% less than the 2022/23 MR indicator.

November soybean futures fell 0.8% to $480.4/t (-2.3% for the week), according to a report on the Chicago Stock Exchange.

On the Winnipeg exchange, November canola futures rose 1.1%, and yesterday another 0.2% to CAD 772.6/t or $573.6/t (-7.4% for the month).

On Paris Euronext, November rapeseed futures for two sessions fell by 3% to €447.25/t or $487.8/t (-5.4% for the month).

Physical demand prices in the EU, after a slight increase last week, fell again to €400-410/t DAP Germany, $385-395/t Romanian CRT ports and €380-400/t Baltic CRT ports.

In Ukraine, on August 11, 3.7 million tons of rapeseed were threshed from 1.315 million hectares or 94% of the area with a yield of 2.81 t/ha (2.6 t/ha last year). Purchase prices remain at the level of $360-370/t or UAH 14,600-14,900/t with delivery to Danube ports, while in the western regions prices have risen to UAH 13,300-14,000/t for EXW-elevator and FCA-farming.

The oil market in the EU remains under pressure from an increase in the supply of rapeseed oil, so rapeseed prices will continue to fall in the near future, especially as sunflower oil arrives from Ukraine.