W28: Canola & Rapeseed Update

In W28 in the canola landscape, on July 10, August rapeseed futures on the Paris stock exchange increased by 2.3% to USD 495.9/metric tons (mt) but dropped 2.2% WoW due to increased supply pressure. However, on July 14, prices fell by 1.7% to USD 521.00/mt, marking a 30.4% YoY decrease but a 5.9% increase WoW. Meanwhile, on the Winnipeg exchange, November canola futures rose by 3% on July 10 to USD 590/mt, representing an increase of 6.2% WoW. On Thursday, July 13, November canola futures rose by 2.1% to USD 621/mt, showing an increase of 7% WoW and 21% MoM as speculation lifted oil prices to a 2.5-month high.

The USDA forecasts a decrease in the global rapeseed harvest for the 2023/24 season with a total of 87.42 mmt, down by 0.91 mmt from the previous season. However, the European Union (EU) is expected to see an increase of 0.66 mmt to 20.2 mmt, Canada is projected to increase by 1.3 mmt to 20.3 mmt, Ukraine to increase by 0.5 mmt to 4 mmt, and Australia to decrease by 3.4 mmt to 4.9 mmt. Additionally, in the 2023/24 crop year, global vegetable oil production is expected to reach a record level, with rapeseed oil production set to increase by 200 thousand mt to 32.9 mmt compared to the previous year. Canada's canola production is expected to increase significantly to 18.4 mmt in the upcoming fall due to the expansion of sowing areas and favorable weather conditions. This higher production will lead to exports of 8.4-9 mmt and domestic processing needs of 9.5-10 mmt. Australia exported 447,776 mt of canola in May, up 56% MoM from 287,086 mt shipped in April. The main markets for canola in May were Pakistan with 166,529 mt, the United Arab Emirates with 148,856 mt, and Japan with 120,694 mt. Additionally, the current estimate for Australia's canola crop in the ground is 5.72 mmt, which is 29% smaller than the record crop of the previous season (2022/23).

In the 2022/23 season, the EU significantly increased its rapeseed imports from third countries, reaching 7.3 million metric tons (mmt) compared to the previous year's volume of 5.5 mmt. Australia and Ukraine are the main trading partners, with Australia accounting for around 49% of the total import volume at 3.6 mmt. In the 2023/2024 season, Ukraine is expected to harvest 3.318 mmt of rapeseed, a 9.1% increase from the previous year, harvested from 1.35 million hectares with a yield of 2.65 mt/ha. France's rapeseed crop for 2023 is forecasted to rise by 2.5% to 4.64 mmt, despite an expected drop in yields compared to the record levels of the previous year. On the contrary, Germany's 2023 winter rapeseed crop is estimated to decrease by 3.3% YoY to 4.14 mmt, unchanged from the previous June estimate. Furthermore, hail on July 8 affected several hectares of rapeseed, wheat, spring barley, and flax in the northwest of Yvelines and the west of Val-d'Oise of France. Similarly, in Moldova, recent rainfall caused damage in some areas, with over 156 hectares of oilseed rape affected in the Petrușani locality, Râșcani district. In Belarus, mass harvesting of grain crops and rapeseed is planned to begin on July 18-20.