W11 Canola/Rapeseed Update: Global 2023/24 Oilseed Production Forecast Adjusted Downward, Russia Extends Rapeseed Export Ban

USDA Lowered Global Oilseed Production Forecast for 2023/24

According to the United States Department of Agriculture (USDA), the global oilseed production forecast for the 2023/24 season has decreased by 0.7 million metric tons (mmt) to 658.7 mmt. This decline is mainly due to drops in soybean and sunflower seed production. The decrease, however, is partially offset by higher canola production, mainly in India, Russia, and Ukraine.

Russia Extends Ban on Rapeseed Exports to Safeguard Domestic Market

The Russian government has extended the ban on rapeseed exports until August 31, 2024, as outlined in a decree signed by the Cabinet of Ministers. This decision follows a proposal from the Ministry of Agriculture on Feb-24 to prolong the export restriction. Initially implemented from April to August 31, 2022, the ban has been extended multiple times, with the latest extension expiring on February 29, 2024. The ban aims to safeguard the domestic market from rapeseed shortages and sharp price increases. In 2023, Russia's rapeseed harvest decreased from 4.5 to 4.2 mmt. Additionally, the ban supports local processing enterprises and ensures high-quality feed for livestock based on this oilseed.

UGA Forecasts Ukraine's Rapeseed Harvest at 4.2 MMT for 2024

The Ukrainian Grain Association (UGA) has estimated Ukraine's potential harvest of grain and oilseed crops for 2024 at 76.1 mmt, a decrease from the 82.6 mmt predicted by analysts for 2023. The rapeseed yield forecast is around 4.2 mmt, slightly lower than the 4.3 mmt harvested in 2023. Ukraine's rapeseed exports are anticipated to remain unchanged from the current season, totaling 3.6 mmt.

Germany Forecasts Decreased Winter Rapeseed Yields for 2024

Germany anticipates a significant decrease in wheat and winter rapeseed yields in 2024. Grain crop harvests are forecasted to reach 20.14 mmt, while oilseed harvests are estimated at 3.93 mmt, marking respective year-over-year (YoY) declines of 6.5 and 6.9%. These reductions are due to decreased acreage for both crops due to unfavorable weather conditions experienced last fall. Unusually high rainfall, rather than drought, is cited as the primary cause for the reduced yields.

Canada's Canola Exports Increased 8% YoY in 2023/24 MY

According to the Canadian Grain Commission, Canada exported 3.2 mmt of canola in the 2023/24 marketing year (MY) as of March 3, marking an 8% YoY increase. However, in Mar-24, USDA experts revised the forecast for canola exports from Canada by 0.1 mmt to 7.55 mmt due to increased processing volumes. Despite this, prices for Canadian canola remain lower than those for European Union (EU) rapeseed, potentially leading to increased European purchases if prices rise further. Furthermore, Ukraine has significantly reduced its supply of rapeseed to the EU due to the border blockade with Poland, potentially allowing European farmers to sell their rapeseed stocks.

Australian Canola Exports Declined in Jan-24 Due to Smaller Crop

According to the Australian Bureau of Statistics, Australia exported 424,574 metric tons (mt) of canola in Jan-24, down 25% month-over-month (MoM) from the 563.12 thousand mt exported in Dec-24 and a 40% YoY decrease from the 713.18 thousand mt shipped on Jan-23. This is due to Western Australia experiencing a smaller crop in the 2023/24 season because of a drier growing season. Germany was the largest market for Jan-24 shipments with 99.34 thousand mt, followed by Pakistan with 65.78 thousand mt and Belgium with 58.47 thousand mt.