Australian rapeseed prices fall to 8-month low

Australian domestic rapeseed prices are falling following a decline in global prices. During the week in Victoria, canola prices on the Geelong-Melbourne basis fell by 4.6% to an 8-month low of AUD 754/t or $512/t.

 

The main reason for the price drop was a sharp drop in EU market prices. During the week, rapeseed futures in Paris fell by 6%, which increased the pressure on Australian canola export prices.

 

Additionally, the markets are being pressured by a 12.5% drop in oil prices after the announcement of the US election results, as lower energy prices reduce demand for vegetable oils from biofuel producers.

 

The decline in the Australian dollar against the US dollar to an 8-month low of 0.689 AUD/USD is also increasing pressure on domestic prices, as it affects the competitiveness of Australian agricultural products on global markets.

 

Australian wheat prices are also falling. Standard white wheat (ASW) has fallen for the seventh week in a row. At the same time, the premium for high-protein durum wheat has increased by AUD 27/t to AUD 39/t compared to September. Thus, the difference between prices for different wheat classes is increasing in anticipation of data on the quality of the new crop.

 

Weather conditions in Victoria are improving the outlook for the wheat crop but increasing the risk of a drop in protein content. Cold temperatures and rainfall in the south are helping to fill the grain and increase yields. However, a drop in protein content will lead to higher premiums for quality food wheat.