Rape and canola prices rose by 4-8% for the week amid a possible reduction in the harvest in the EU

Despite large inventories, a 3.2% drop in oil prices and a slowdown in global exports, rapeseed and canola prices rose 4-8% during the week amid frost in northern Poland and Germany that could damage crops.

Oil prices continued to fall after a speculative rally triggered by the escalation of the conflict between Israel and Iran, with July Brent crude futures for the week down 3.2% to $83.2/barrel.

August rapeseed futures on the Paris MATIF exchange rose by 4% to €477.5/t (+5.5% for the month) or $512.9/t.

Strategie Grains experts in the May report left the forecast for rapeseed production in the EU in 2024 at the level of 18.1 million tons (9% less than last year's 19.5 million tons), given the good weather conditions in the main growing regions.

In 2023/24, the EU reduced rapeseed imports compared to the previous season by 34% to 4.22 million tons, of which 65% were supplied from Ukraine.

Following EU canola prices for the week on the Winnipeg exchange, July canola futures rose 8% to CAD 668/t or $485/t and November futures rose 7.4% to CAD 682/t or $495 /t, despite the increase in stocks and the drop in export rates in Canada. Such a jump in prices will not allow Canada to increase supplies to the EU in the current season, although just a week ago canola prices were $40-50/t lower than rapeseed, which made it very attractive to European buyers.

According to StatsCan, canola stocks in Canada on 04/01/24 amounted to 8.2 million tons, which is 17% higher than on 04/01/23 (7 million tons). The export of canola in the 2023/24 MR decreased by 48% compared to the same period of the previous season, from 6.04 to 4.07 million tons, in particular in March - to 672 thousand tons (923 thousand tons in March 2023).

According to estimates by Oil World (Germany), the global export of rapeseed and canola in the first quarter of 2024 decreased by 15% to 4.3 million tons compared to the same figure in 2023, in particular from Australia - from 1.9 to 1.7 million tons , Canada - from 2.5 to 1.5 million tons, Uruguay - from 0.3 to 0.1 million tons. At the same time, exports from Ukraine increased from 0.31 to 0.79 million tons, and from the Russian Federation remained at the same level 0.2 million tons. The total volume of exports from Australia, Canada, Ukraine, and Uruguay (whose share is 95% of world exports) in March decreased by 24% compared to March 2024 to 1.37 million tons.

The main buyers of rapeseed in the 1st quarter were the EU and China, which reduced purchases from 1.8 to 1.7 million tons and from 1.7 to 1.1 million tons, respectively.