Oilseeds market outlook: High expectations for French rapeseed crop, rate of US soybean export sales accelerating

Local oilseed grower representatives, Fédération française des producteurs d’oléagineux et de protéagineux (FOP), also reported that rapeseed sowings ahead of the 2022 harvest are set to increase around 15% to 20% when compared to the prior year.

Growers are motivated to expand the rapeseed planted area based on good weather, good yields this season and high prices, according to a press release from FOP.

Rapeseed prices have seen a massive hike this year on the back of restricted global supplies, particularly given Canada’s drought hit crop.

A rise of 15-20% in the French 2022 rapeseed area would see it expand to between 1.12 million and 1.17 million hectares, compared to 977,000 hectares this season; summer rain, which damaged wheat crops, was favorable in terms of soil moisture for rapeseed, which is drilled in late summer, noted a report on Reuters.

Rapeseed sowings ahead of the 2021 harvest in France were disrupted by drought and the area was also affected by frosts and pest attacks later in the season.

French officials and growers had expressed concern that the reduction in area would push the final domestic rapeseed crop below 3 million tons for the first time in 20 years but good yields compensated for the loss.

While Canadian canola production estimates continue to be reduced, Australian production confidence is growing, noted CRM Agri in analysis yesterday.

US soybean export sales​

In terms of soybeans, US supply confidence has increased, they added. And demand has also, with the rate of US soybean export sales accelerating over recent weeks.

“Heading into the start of the season, sales are now line with previous years. Looking ahead, and Chinese demand for US beans will be in focus and is gaining media attention. Although new crop sales are well behind the exceptional sales of 2020/21, the recent fast increase in new crop sales has paused the sell-off in markets.”​

The next focus for markets will be the prospects for the South American soybean crops, said the UK analysts.

“Although planting isn’t set to be underway until October, the chances of La Nina have continued to increase,” ​they noted.

A potential loss of Argentine and Brazilian soy would leave China no alternative other than US soy and lead to heightened volatility, said CRM Agri. 

Meanwhile, the oilseed market specialists said that, with vegetable oil prices incentivizing crushing of soybeans, expectations for meal availability have continued to increase.