Lower forecasts for canola production in Canada continue to support rapeseed prices

2021-07-29 13:00:29
Machine translation
Lower forecasts for canola production in Canada continue to support rapeseed prices

Due to dry weather in the prairies of Canada, oil world analysts lowered their forecast for canola production in the country in 2021 by 1.7 million tons to 16.9 million tons, which is 2 million tons lower than the 2020 harvest.

 

In a July report, USDA experts predicted canola production in Canada at 20.2 million tons, compared with last year's 19 million tons.

 

In July, the weather in the Canadian Prairies did not contribute to the development of canola and spring wheat crops. Precipitation was less than normal and very uneven, and the heat sometimes reached 35-36 OhC. according to forecasts, there will be no significant precipitation for 5-7 days, and the temperature will remain above normal, which will negatively affect crops that are in the filling stage.

 

As of July 19, Saskatchewan's moisture reserves were estimated to be 39% low, 53% very low, and only 8% normal. The updated report on the state of crops will be published on July 30.

 

In the period August – June 2020/21 MG, Canada increased canola exports from 9.3 to 9.9 million tons compared to the same period of the previous season, with the USDA forecast of 10.5 million tons. but in June, the volume of exports decreased to the lowest in the last 21 months of 594 thousand tons compared to 824 thousand tons in June 2020.

 

Under pressure from the strengthening of the Canadian dollar against the US, November canola futures fell 2.1% yesterday to 875 CAD/ton or 7 700/ton.

 

As a result of lower production forecasts in Canada, rapeseed prices resumed growth. Yesterday on the Euronext exchange, August rapeseed futures rose by €5.75/ton to €535/ton or € 634 / ton.

 

In Ukraine, purchase prices for rapeseed after a preliminary decline over the past two days increased by 500-600 UAH/ton to 19000-19200 UAH/ton or 610-620 $/ton, even despite the increase in supply and strengthening of the hryvnia exchange rate against the dollar. Processors left prices at the level of 18500 UAH/ton with delivery to the plant, but many processors, due to the delay in harvesting rapeseed, reduce plans for its processing against the background of the need to switch to sunflower processing.

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