European rapeseed futures now exceed the €460/t mark and their 200-day moving average for November 2024, says CRM Agri.
The analysts expect Paris rapeseed prices to average €470/t (US$520m) in Q3.
This recovery is driven by two key factors: a rally in vegetable oil markets and a resurgence in canola prices, according to a review by those oilseed market specialists.
Vegetable oil markets, crucial for oil-heavy crops like rapeseed, have seen a turnaround. Soyoil prices, which had dipped due to increased soybean supply and biodiesel plans in California, are bouncing back rather than dragging down competing oils like palm and rapeseed oil.
CRM Agri highlights that the expected soybean supply surge is still speculative, depending on harvests yet to occur in South America and the US.
Meanwhile, other major vegetable oils, such as palm and sunflower oil, are facing tighter supplies. For instance, Indonesia, the top palm oil producer, reported a 17% drop in stocks due to lower production. This tightening supply profile contributes to the global forecast of shrinking vegetable oil inventories in 2024/25, adding support to rapeseed prices.
Canola prices have also seen a significant recovery, with Winnipeg canola futures rising over 7% from a three-year low. CRM Agri points out that this is partly due to the vegoil price bounce, but also because of stronger-than-expected exports from Canada, spurred on by demand from China.
Europe, where rapeseed crush demand remains strong, may need to compete harder for imports, especially as Ukraine’s harvest is smaller, and Australian output is limited, warn the analysts.
Soybean market
In the soybean market, prices have staged a modest recovery from near four-year lows.
CRM Agri maintains a Q3 forecast of $10.80/Bu for Chicago soybean prices, citing potential for further recovery. However, the market is still cautious, as the massive US harvest expected this year has already been largely priced in, finds the review.
Weather conditions heading into mid-September could pose risks to the crop, but so far, the market remains optimistic.
Additionally, South American soybean crops, crucial for global supply, have yet to be planted, and farmers may need more incentive from prices to proceed, reports CRM Agri.
EU cereal production challenges
On Monday, the EU Commission released its monthly MARS report regarding crop development in EU member states and several neighbouring countries. Overall, the outlook for total cereals remains poor as the yield is estimated at 5.36 t/a, 0.12 t/ha below the five-year average.
While harvest remains underway on the continent, the EU officials hve reduced yield estimates for soft wheat, barley (winter and spring), and corn. The downward revision to winter crops has been largely attributed to excessively wet conditions across western and northern Europe, in addition to dry weather in eastern Europe, notes AHDB analysis.
"Unfavourable weather conditions have continued during the summer where the Baltic countries experienced considerable rainfall which has led to lodging and impacting on grain quality. Furthermore, in the north-west of mainland Europe, rainfall has persisted and interrupted harvesting, leading to further pressure on crop conditions."
The downward revision to corn has come because of hot temperatures and limited water availability during July to mid-August in southern and eastern Europe.
EU cereal imports
Recently, the EU has been importing more cereals in response to poorer production seen in numerous EU member states, reports the AHDB.
In comparison to the three-year average, as at the same time period, imports of soft wheat, barley, and corn are all greater in 2024/25.
