Rapeseed Prices Tumble Amid Falling Oilseeds Prices

Rapeseed prices have continued to decrease to €683.50/mt this week. The price is already down 12% MoM from the recent price rally that came from news of positive planting in Europe, estimates of a good Australian crop and lower crude oil prices

This bearish price movement is seen across Europe's oilseeds and vegetable oil markets. Sunflower oil export prices are down to $968/mt from $1070/mt in May while the Malaysian palm oil futures is also down RM 4199/mt, the lowest in the last 12 months.

The current weakness in palm oil is one source of the price decreases in rapeseed. Rapeseed is affected by movements in other oilseeds as they all race for a share in the oils and oilseeds trade - palm has also fallen to a record low putting immense downside pressure on oilseeds and other edible oils.

In the Canadian Prairies too, weather conditions which are better than year-ago levels have bode well for the seeded canola crop. The 2022/23 Canadian canola crop according to the latest data from the European Commission is estimated to be 20 million mt 59% above the previous marketing year. The export from Canada to the rest of the world is also projected to recover by 78% to 8.8 million mt. In the UK production is forecasted to increase by 30% next season.

Also, the bearish debility in rapeseed remains uncertain over future biodiesel consumption and a weaker Chinese vegetable oil demand. China, a big buyer in the oilseeds markets have seen some fragility in its oilseeds demand on the back of a slower pace of trade. On top of this, according to USDA FAS(Foreign Agriculture Service), domestic consumption of rapeseed oil in the 2022/22 season will drop YoY to 6.5 million mt in Europe.

Overall, the global 2022/23 rapeseed supply and demand are at a comfortable level: Production is more likely to grow by 9% YoY to 81 million mt on better crop output in Canada and in the European Union. News equally keeping a lid on prices is closing stocks - global closing stocks are estimated at 3.1 million metric tonnes up 6% YoY.

World rapeseed export prices are all trending lower alongside weaker oilseeds. The EU Moselle export price as quoted by the International Grains Council is at $773/mt, the Export price of Canada at $771/mt and the export price of Australia also down to $807/mt.