W36: Canola & Rapeseed Update
In W36 in the canola landscape, rapeseed prices on the Paris Stock Exchange have recently fallen due to increased imports of Ukrainian rapeseed into the European Union (EU) at lower prices. On Monday, September 4, November futures on the Paris Stock Exchange dropped by 1.7% to USD 500.06 per metric ton (mt), despite Strategie Grains reducing its EU harvest forecast by 0.4 million metric tons (mmt) to 18.9 mmt. The decline continued on Tuesday, with rapeseed futures falling 2% to USD 489.85/mt, representing a 2% week-on-week (WoW) and 4% month-on-month (MoM) decrease. In total, rapeseed futures fell by 5.2% over the course of a week, from USD 508.93/mt on September 1 to USD 482.59/mt on September 8.
The Aug-23 EU rapeseed production forecast stands at 18.9 mmt, a drop from the 19.3 mmt projected in Jul-23 and a 2.7% decline compared to the 19.4 mmt produced in 2022. The rapeseed harvest was notably disappointing in France, Germany, and Romania. However, the decreased supply from the rapeseed crop is expected to be partially offset by imports, with an anticipated rise in shipments from Australia and Ukraine. Australian availability is expected to be supported by ample stocks and reasonable harvest prospects despite some areas experiencing drought conditions.
Between the beginning of the current agricultural season on July 1 and September 3, EU countries imported only 519.8 thousand mt of rapeseed, nearly half the amount compared to the same period in the previous season, when they imported 1.03 mmt. Additionally, the majority of EU countries are against extending the ban on importing Ukrainian grain products beyond September 15. This opposition comes despite a proposal from Poland, Hungary, Romania, Bulgaria, and Slovakia to extend the restrictions. The ban, which covers Ukrainian grain products like wheat, corn, rapeseed, and sunflower seeds, was initially implemented to protect the markets in these five countries from cheaper imports.
In the 2022/2023 season, Germany imported around 5.74 mmt of rapeseed. Most of this rapeseed came from Australia, with 1.4 mmt being exported to Germany. Additionally, Poland significantly increased its rapeseed exports to Germany, with a total of 540 thousand mt, compared to just 230 thousand mt in the previous year. France also played a significant role, exporting 1.1 mmt of rapeseed to Germany, marking a YoY increase of 388 thousand mt.
Ukrainian farmers have initiated the sowing of winter grain crops and are actively sowing rapeseed. As of the beginning of Sept-23, approximately 699.7 thousand hectares (ha) of winter crops had been sown, with rapeseed accounting for 654.9 thousand ha. Favorable weather conditions have allowed for the completion of rapeseed sowing in regions like Volyn, Poltava, Sumy, and Ternopil. The largest areas sown with winter rapeseed were in the Ternopil region (72.5 thousand ha), followed by Vinnytsia (67.2 thousand ha) and the Kirovograd region (59.4 thousand ha).
Lastly, the canola cultivation area estimate in Rio Grande do Sul, Brazil, is 67,219 ha, with an estimated productivity of 1.63 mt/ha. Dry weather up to August 31 contributed to good crop development and an expansion in harvesting. Despite the overall good appearance and development of crops, concerns have arisen due to the recent torrential rains and winds, potentially causing damage such as flower loss in flowering crops and grain shedding in crops in the final stages of maturation.