Rapeseed and canola prices supported by lower crop forecasts in Canada

In the updated report of the Statistical Office of Canada dated August 30, the forecast for canola production in 2021 was reduced by 24.3% compared to last year from 19.5 million tons to the lowest 14.7 million tons since 2012, while USDA experts in August estimated it at 16 million tons.

Yesterday, canola prices on the Winnipeg Stock Exchange almost did not react to the report's data, as traders expected a more significant reduction in the production forecast – up to 14 million tons, and some even up to 12-13 million tons.

• November canola futures declined during the session, but after the report was released, they recovered slightly, falling only 0.9% for the day to 904.3 CAD/ton or 7 723/ton, and in general for the month they rose by 5.6%.

Heavy rainfall in the prairies of Canada, which has been going on for two weeks, only worsens the yield and delays the harvesting of canola, which ripened much earlier due to the drought.

The deterioration of the prospects for the canola harvest in Canada reduces export forecasts, especially to the EU, so European processors are actively buying up local and Ukrainian rapeseed, raising purchase prices.

• November rapeseed futures on Paris ' Euronext rose 1.75 €/T yesterday to 573.25 €/t or 6 677.5/t, partially recouping Friday's decline.

In Ukraine, purchase prices for rapeseed at the end of last week reached порт 675-680/ton or UAH 20300-20550/ton in ports, and producers stepped up sales at high prices.

Domestic processors plan to complete rapeseed purchase programs by September 5-10 and switch to accepting sunflower seeds, the demand prices for which with delivery to the plant are still only 19800-20500 UAH/ton.

Prices for European and Ukrainian rapeseed are still 4 40-50/ton lower than for Canadian rapeseed, so it is more profitable for European processors to raise prices for Ukrainian rapeseed a little more than to buy expensive Canadian rapeseed with GMOs, or reduce processing volumes in the current season. According to traders ' estimates, 1.8-2 million tons of Ukrainian rapeseed planned for export have already been sold, and in September most exporters will complete rapeseed purchase programs, as the terminals will start accepting corn.