Strategie Grains Lowers Rapeseed Forecast
Strategie Grains has once again lowered its forecast for the EU rapeseed harvest in 2024. The latest estimate has been reduced from 17.8 million tons to 17.27 million tons, marking a 14% decrease from 2023 production levels. Despite this reduction, rapeseed prices continue to decline, pressured by falling oil and soybean prices.
Sunflower and Soybean Production Adjustments
The forecast for sunflower production has also been revised downwards, from 10.49 million tons to 9.65 million tons, compared to 9.8 million tons in 2023. However, the estimate for the soybean harvest remains unchanged at 2.99 million tons, which is 4.6% higher than last year. This increase is attributed to larger sowing areas compensating for decreased productivity.
European Commission’s Forecast
Recently, the European Commission also lowered its forecast for the EU rapeseed harvest in the 2024/25 marketing year by 0.5 million tons, now expecting 18.3 million tons.
Market Reactions and Price Movements
On the Paris exchange, November rapeseed futures dropped by 0.8% to €476.5 per ton ($515.76 per ton), reflecting a 5.2% decline for the week. Conversely, August futures saw a slight increase of 1.2% to €464.5 per ton ($502.77 per ton), partially recovering from a previous decline.
In Canada, November canola futures on the Winnipeg exchange fell by 1.7% to CAD 635 per ton ($458.7 per ton), showing a 6.1% decline for the week.
Soybean and Oil Prices Influence
The rapeseed market is under significant pressure due to a sharp drop in soybean and oil prices. Over two sessions, November soybean futures in Chicago fell by 3.8% to $382 per ton, a 6.7% decrease for the month, influenced by favorable US crop conditions.
Impact on Ukrainian Market
In Ukraine, purchase prices for rapeseed delivered to Black Sea ports fell by another 500 hryvnias per ton, reaching 22,400-22,500 hryvnias per ton ($470-475 per ton). This price drop has significantly slowed farmer sales. Additionally, the strengthening of the hryvnia from UAH 41.4 to UAH 40.95 per dollar has forced exporters to lower their purchase prices.
Weather Concerns Affect Farmer Decisions
Dry and hot weather conditions pose a risk to soybean and sunflower yields. Consequently, farmers are holding back sales as they assess the potential yield of late crops and future income prospects.
Comment
The continuous downward revision of the EU rapeseed harvest forecast by Strategie Grains highlights the challenges faced by the agricultural sector. Despite lower production estimates, rapeseed prices remain under pressure from broader market dynamics, including the decline in soybean and oil prices. The cautious approach by farmers in Ukraine, amid fluctuating currency values and adverse weather conditions, further underscores the complexities of the current agricultural market. As the season progresses, stakeholders will need to closely monitor these factors to navigate the evolving landscape effectively.