W30: Canola & Rapeseed Update

In W30 in the canola landscape, rapeseed futures on the Paris stock exchange experienced fluctuations. On Monday, July 24, the August futures fell by 3.8% to USD 497.99/metric ton (mt), down 27.5% year-on-year (YoY) as the contract for August is expiring. On July 25, prices rose slightly by 0.3% to USD 499.78/mt but remained 28.4% lower YoY. However, rapeseed prices faced unfavorable conditions on Thursday, falling to USD 477.19/mt due to contract closing. On Friday, futures dropped to USD 462.57/mt due to pressure from increased offers from European Union (EU) and Ukrainian farmers. Meanwhile, November canola futures on July 24 on the Winnipeg exchange increased by 0.5% to USD 627.15/mt, showing a 4.4% YoY increase. However, on July 25, canola futures fell by 0.7% to USD 622.92/mt but still had a YoY increase of 1.3%. On Friday, July 28, canola futures rose to USD 625/mt due to improving weather conditions in the Canadian prairies.

The US Department of Agriculture (USDA) forecasts the 2023/24 season global rapeseed harvest to reach 87.4 million metric tons (mmt), while consumption is expected to reach 85.7 mmt, exceeding June's estimate by 0.5 mmt and 2022's consumption by 0.4 mmt. Ukraine is forecast to harvest 4.0 mmt of rapeseed, which is 800 thousand mt higher than the previous projection. However, the EU’s rapeseed harvest forecast was reduced to 19.4 mmt due to drought, slipping behind Canada to become the world's second-largest rapeseed producer.

The July crop yield forecast for the EU in 2023 shows that Ireland is expected to have the highest average yield at 4.51 mt/hectare (ha), while Finland is forecast to have the smallest yield at 1.18 mt/ha. Poland's average yields are expected to increase by 4% to 3.23 mt/ha compared to 2022's 3.38 mt/ha. The EU's overall average expected yield is 3.32 mt/ha. In Germany, the winter rapeseed area for 2023 is estimated to increase by 11% YoY, reaching 52,700 ha, likely driven by rising producer prices and good harvest results for winter rapeseed oil in the previous season.

Following missile attacks on the infrastructure of the Black Sea and Danube ports in Ukraine, some ships left the Danube ports due to the risk of new attacks. Consequently, the export demand for rapeseed in Ukraine sharply decreased. On Monday, purchase prices for rapeseed delivered to Danube ports dropped between USD 15/mt and USD 40/mt but later recovered to USD 365/mt to USD 370/mt. Although rains have caused delays in the rapeseed harvesting process, the yield remains high. Farmers are actively selling canola with quick payment options to replenish working capital.

Additionally, Ukrainian agricultural producers are currently harvesting winter rapeseed from 931.27 thousand ha, which accounts for 68% of the forecasted area. The total oilseed harvest so far is nearly 2.5 mmt, with an average yield of 2.68 mt/ha. Lastly, in Belarus, 533.9 thousand mt of winter rapeseed were harvested from 212.1 thousand ha representing 63.7% of the total harvested area as of July 27.