Canola prices continue to fall under pressure from increased crop forecasts in Canada and the EU

Stratégie Grains experts raised their forecast for EU rapeseed production in 2023/24 MY by 0.2 to 19.7 million t (19.5 million t in 2022/23 MY) compared to previous estimates, thanks to better-than-expected yields in Romania , France and Germany.

In October, rapeseed and canola prices fell by 6% and 4.2%, respectively, on the back of improved crop forecasts in the EU and Canada, where harvesting took place in favorable conditions.

February canola futures on the Paris MATIF fell 6% in October but were up 1.2% since Monday at €432.75/t, or $458/t, while January canola futures on the Winnipeg October fell 4.2% to CAD 688/t or $497/t, having lost 19.2% since September 1.

November soybean futures in Chicago fell 8.3% to $467/t from September 1 under pressure from active soybean planting in Brazil and harvesting in the US.

In Ukraine, rapeseed prices remain at $330-345/t with delivery to Danube and Black Sea ports and €380-390-410/t with delivery to Baltic ports and factories in Germany. But the number of offers is reduced by the increase in the price of road transport and the shortage of trucks due to the active harvesting of late crops.

MarketsFarm experts estimate the canola harvest in Canada at 18 million tons, which is slightly higher than official data. But an increase in own processing to 10.5 million tons will lead to a reduction in exports to 7.5 million tons, which will reduce pressure on the market. Analysts suggest that producers wait until the market has used up the reserves, and after the new year, demand will increase and prices will rise again.

An increase in the rapeseed harvest in the Russian Federation and an increase in the supply of rapeseed oil to China to 100,000 tons per month reduces the demand for Canadian canola from China, which also actively imports cheaper canola from Australia and rapeseed from Ukraine.

In the EU, rapeseed prices will remain under the pressure of a good harvest, significant stocks and offers of cheap rapeseed from Ukraine, the export of which in the current season may reach 4 million tons.

A sharp drop in oil prices, followed by vegetable oils, will increase pressure on canola quotes in the near future, but the postponement of canola sales by European farmers to the new year will increase supply and not keep prices from rising.