W33: Canola & Rapeseed Update

In W33 in the canola landscape, on Monday, August 14, the November futures on the Paris stock exchange fell 3% to USD 485.96 per metric ton (mt). This also marked a 32.2% year-on-year (YoY) decrease and a 5.4% drop month-on-month (MoM). However, on August 15, rapeseed prices rebounded by USD 6.52/mt to USD 492.48/mt, driven by higher canola prices in Winnipeg and rising oil and palm oil prices. Furthermore, the rapeseed harvest in Australia is expected to decrease by 30% YoY to 5.59 million metric tons (mmt). Subsequently, on August 16, rapeseed futures further rose by USD 7.88 to USD 500.35/mt, driven by increased demand for vegetable oil from India. The upward trend in rapeseed futures continued, reaching USD 515.57/mt by August 18, a 4% increase week-on-week (WoW).

The United States Department of Agriculture (USDA) lowered the global oil crop production forecast by 3.6 mmt to 663.7 mmt in its Aug-23 report due to reduced soybean harvest in the United States (US) and decreased rapeseed production in Canada, which will not be able to compensate for the increase in rapeseed and sunflower harvest in Ukraine and Russia. Although canola and rapeseed cultivation areas increased by 1.1% to a record 42.26 million hectares (ha) in the 2023/24 FY, the gross harvest is expected to drop 2.9% YoY.

According to data from the Australian Bureau of Statistics, Australia's rapeseed exports in Jun-23 declined to 329,162 mt, a 35% decrease MoM and a 39% decrease YoY. Notably, Pakistan emerged as the primary importer with 120,599 mt, representing 37% of total Australian exports. Japan followed with 71,804 mt, Belgium with 62,065 mt, and France with 54,897 mt. Market experts suggest that Australia might continue exporting around 150 thousand mt to 300 thousand mt of rapeseed per month until the new crop is harvested in Nov-23.

In Ukraine, as of August 11, about 3.7 mmt of rapeseed were harvested from 1.315 million ha, covering 94% of the total area, with an average yield of 2.81 mt/ha compared to 2.6 mt/ha in 2022. Rapeseed purchase prices remained steady at USD 360 to 370/mt for delivery to Danube ports, while in the western regions, prices have risen from USD 362.13 to USD 381.19/mt for EXW-elevator and FCA-farming transactions. The decrease in Canada's rapeseed production, projected at 13 to 16 mmt, has boosted oilseed prices and impacted Ukraine's rapeseed export rates. Looking ahead, Ukraine's rapeseed exports for the 2022/23 marketing year are projected to reach 3.4 to 3.6 mmt, marking a substantial 2.7% rise from the previous year. The European Union (EU) is the main recipient, importing nearly 3.0 mmt, accounting for 41% of the EU's total imports.

Rapeseed production in South Africa has increased considerably over the last two decades, growing sevenfold since its introduction in 1990. South Africa is forecast to produce a record rapeseed crop of 220 thousand mt in the 2023/24 MY, representing an increase of 5% YoY, according to a report by the US Department of Agriculture's Foreign Agricultural Service (FAS). From 2019 to 2020, the area planted with rapeseed has grown from 74 thousand to 128,100 ha, while production has almost tripled.

Lastly, as of August 17, over 6.0 mmt of grain, including 931 thousand mt rapeseed, have been harvested in Belarus. The country is also preparing the soil for the upcoming winter crop of 2024, with winter rapeseed sowing covering 57% of the area, reflecting a doubling of rates compared to the previous year.