W50: Weekly Canola & Rapeseed Update

Global

Decrease in Prices of Oilseeds on World Stock Exchanges on December 15

On December 15, the price of rapeseed for February delivery declined 0.6% on the Paris Stock Exchange to USD 591.98/MT, a 20.5% YoY decrease. On December 15, the price of Canadian canola plummeted 13.2% YoY and declined 0.8% on the Winnipeg Stock Exchange, reaching USD 635/MT.

Increase in Oilseed Prices on Global Stock Exchanges on December 13

Oil futures quotations on the world's stock exchanges closed on December 13th with a price increase. Rapeseed prices on Matif rose by 1.4% on December 12th and were 21% lower than in 2021. Canola from Canada gained 0.4% yesterday on the Winnipeg Stock Exchange and cost USD 641.07/MT, which is a decrease of 12.9% YoY. Oilseeds and oilseed prices increased as a result of the growing price of crude oil on the international markets since the start of W50.

Global Arable Market Report, 12 December 2022

The Black Sea region's increased competitive supplies, Australia's huge production forecasts, ongoing recessionary concerns, and increased supply from other countries put pressure on the world's grain markets in W49. Grain price declines were restrained globally by concerns about Argentine grain supply and expectations of rising Chinese demand. Even if soybean prices were strong in the UK, this did not influence rapeseed prices. On Friday, December 9, Paris rapeseed futures for May 2023 finished at USD 605.49/MT, down by USD 0.79/MT across W49. Rapeseed shipped to Erith was priced at USD 518.84/MT, a decrease of USD 7.42/MT from W48. Since sterling was stronger against the euro on Friday but somewhat weaker by 0.25% across the board, more losses were reported in the UK market.

Europe

Rapeseed Future Prices Fell on Euronext on December 15th 

Price drops were observed at Euronext, the primary futures market in the EU, during the session on December 15. Rapeseed follows a path that is very similar to that of wheat with a price decline of USD 3.71-3.44 for shipments that arrive at their destination between February and May, they are currently priced at USD 591.98-598.87/MT.

In the 2022/23 Season, EU Rapeseed Imports Increased by 27% YoY

Rapeseed imports into the EU have increased by 27% YoY to 3.15MMT so far in the 2022/23 season, compared to 2.30MMT in 2021/22. As of December 11, soy imports into the European Union for the 2022/23 season, which began on July 1st, had decreased to 4.86MMT from 5.81MMT during the same period in the previous season.

War Dries up Europe’s Access to Vegetable Oil

According to a representative of the sector, the European Union needs to find a replacement for the majority of the vegetable oil it previously imported from Ukraine. In 2021, 32% of the exports of Ukrainian vegetable oil were to Europe. Canola and soybeans are predominantly grown in Ukraine's northwestern region, far from the country's most active conflict zone. Winter canola is typically sown on 2.5M acres in Ukraine. After France and Germany, it produces the third-most canola in Europe. This winter, farmers might plant more canola and soybean acres. However, the war has significantly reduced oilseed crushing and oil exports, and this is unlikely to change. While some goods are being shipped through the ports in the Odesa region that are members of the United Nations shipping corridor, two of the country’s largest ports, Mariupol and Berdyansk, remain under Russian control.

As a result, Ukraine has lost 50–60% of its export capacity. Although vegetable oil is moving by truck through Poland and being loaded onto ships at ports in the Baltic Sea, that is a complex path to market.

United Kingdom

Wheat and Rapeseed Crops in United Kingdom Are Up

As of W50, the gross harvest of rapeseed reached 1.4MMT, representing an increase of 39% from 2021. Rapeseed yield also increased by 17%, while sown area increased by 18% YoY.

Crop Planting Update for Oilseed Rape in the UK 

At the end of November, oilseed rapeseed crops were rated 77% good or excellent, a slight decline from 78% in 2021. Oilseed drilling was finished at the end of September, with 27% of the drilling taking place in September and 73% in August. The board said, in general, rapeseed has been established successfully, although some places failed as a result of the prolonged dry weather at the end of summer. As a result of the subsequent rain, the crop has grown reasonably well; however, the southeast reported that an average of 10% of the drilled oilseed rape area failed due to dry weather or cabbage stem flea beetles.

Canada

Canola Production Numbers for 2022 Are Released

In 2022, Canadian producers planted 6.5M acres of canola in Alberta, which is around 1.1% more than the five-year average but down 2.5% YoY from 2021. Alberta produced over 6MMT, or roughly 31.9% of all canola produced in Canada, marking a 40.3% YoY increase from 2021. About 11.3M acres of canola were sown in Saskatchewan by farmers, a decrease of about 4.9% YoY from 2021 and 5.3% off the five-year average. Saskatchewan produced 9.6MMT of canola or around 50.8% of Canada's total canola. This represents a 43.5% increase YoY but a 6.3% decrease compared to the five-year average.

In Manitoba, 3.3M canola acres were sown, a 3.6% YoY decline from 2021 and roughly 1.3% less than the five-year average. The production in Manitoba reached 3.1MMT, which is 16.5% of Canada’s canola production. That’s about a 25% increase from 2021 levels and a 3.2% drop from the five-year average.

Canadian Rapeseed Prices Increased, Repeating W48’s Scenario on the Ice Exchange

Oats, uncooked rice, and Canadian rapeseed trade differently on the SWOT and ICE exchanges, similar to W48. Oats and unprocessed rice prices decreased once again for a week, from December 2 to December 9, 2022, while canola prices increased. Canola quotations have increased for the past two weeks, but less significantly. Its price was USD 849.3/MT on December 2 and subsequently rose to USD 872.4/MT on December 9.

Russia

Export of Rapeseed Oil in 2022 in Russia Could Be a Record

Russian exporters anticipate a record amount of rapeseed oil deliveries to international markets this year at 950K MT compared to 802.5K MT in 2021, despite logistical challenges brought on by the sanctions against Russia. Russia ranks third in the ranking of world exporters of this oil, following Canada and Germany. The annual growth in export demand is the primary factor causing the increase in production volumes. With more than 50% of supplies this year, China continues to be the world's biggest importer of homegrown rapeseed oil. Latvia and Norway are in second and third place, respectively.

Rapeseed oil is also not widely used in Russia, and its use on the domestic market is minimal. According to Russia's projections, 1.44MMT of rapeseed oil is expected to be produced in 2023, and all of it will be exported, resulting in a 0.5MMT increase from 2022. 

The Krasnoyarsk Territory Will Receive USD 7.23M for the Production of Grain and Oilseeds

The farms in the Krasnoyarsk Territory received USD 7.23M from the Russian Federation government for the production and marketing of grains and oilseeds. Of the total, USD 4.63M will be used to produce and market soybeans and rapeseed, and USD 2.60M will be used to cover the costs of producing and marketing grain.

Australia

Australian Farmers Expect Record Harvest of Canola for the 2022/23 Season

In Australia, farmers increased the area under cultivation of the oil crop rapeseed by a significant 10% from 2021/22, setting a new record of about 3.7M hectares. The harvest should only grow by about 4% to 7MMT, according to the agricultural authority's projection, because hectare yields are only slightly above average. That would also stand as an Australian record for all time. The quality of grains and oilseeds in the East varies, according to ABARES. Due to an extended wet spring, neither regional plant protection nor fertilization was possible.

Due to a Weak International Market, the Price of Australian Canola Fell 1.3% WoW in W50

For W50, the grain market in Australia has been inconsistent thus far. Deliveries to Port Kembla (PKE) for canola dropped 1.3% WoW to USD 480/MT from USD 486.10/MT (W49's price) following the weaker international market.

France

Rapeseed Quote Fell Slightly on December 14 on the MATIF Exchange

On December 14, March corn contracts in Paris decreased from USD 304.73 to USD 304.15/MT on the MATIF exchange. Quotes for rapeseed in January decreased from USD 597.01/MT to USD 601.34/MT.

Rapeseed Quote Increased Slightly on December 13 on the MATIF Exchange

On Tuesday, December 13, March corn contracts in Paris on the MATIF market remained constant at USD 304.75/MT. Rapeseed quotations increased from USD 588.53/MT to USD 597.05/MT in January.

France Expanded by Nearly 5% the Area Sown With Autumn Rapeseed

According to the ministry of agriculture, the area of cereals sown in France this autumn increased by 1.2% compared to last autumn to 6.7M hectares, outpacing the average of the previous five years by 0.9%. But in the case of rape, the area sown with rapeseed increased by 4.9%, to 1.3M hectares.

India

India Eyes Record Rapeseed Crop as High Prices Prompt Farmers to Plant More

According to trade and industry experts, rapeseed production in India is expected to reach a record high in 2023 as better prices have encouraged farmers to plant the primary winter crop on over 9% more land than they did a year ago. The world's largest importer of vegetable oils, India, could reduce its costly imports of cooking oils from abroad, which cost the nation a record USD 18.9B in the fiscal year that ended on March 31, 2022.