Rapeseed Futures Curve Signals Softer Long-Term Outlook Despite Firm Nearby Values

Nearby rapeseed prices remain firm on Euronext and in physical EU/Black Sea markets, while forward contracts out to 2028 continue to trade at a clear discount, signaling expectations of more comfortable supplies and softer long‑term values. Despite recent intraday volatility, the rapeseed complex is broadly balanced: EU crushers are well covered short term, Ukrainian offers remain competitive, and early EU crop expectations point to only marginal production changes year-on-year. The pronounced backwardation in the MATIF curve, however, underlines a structural shift toward improved supply beyond 2026/27, with risk skewed to the downside on long-dated positions. For now, weather during flowering and pod filling, crude oil dynamics and canola/soy oil correlations will determine whether nearby futures can sustain current levels or correct lower.

Prices & Forward Curve

MATIF rapeseed futures closed on 25 May 2026 with August 2026 around EUR 515/t and November 2026 near EUR 519/t, essentially unchanged on the day. Further out, the curve softens: August 2027 is indicated near EUR 491/t and November 2027 around EUR 493/t, while 2028 expiries slip toward the mid‑EUR 460–495/t range, reinforcing a clear discount versus nearby contracts (roughly EUR 20–50/t lower along the curve).

In North America, ICE canola futures ended 25 May with July 2026 at about CAD 736/t and November 2026 at CAD 747/t, down almost 2% on the day. Converted at roughly 1.35 CAD/EUR, this implies around EUR 545–553/t, keeping canola at a small premium to MATIF but broadly aligned when accounting for freight and quality. Physical EU rapeseed offers from France (FOB nearby) have firmed from roughly EUR 600/t earlier in May to about EUR 640/t now, while Ukrainian FCA bids for 42% oil rapeseed hover just below this level at around EUR 600/t, reflecting solid export demand from Black Sea ports.

Supply & Demand Drivers

The EU rapeseed balance for 2026/27 is projected to remain relatively comfortable despite some production headwinds. Recent estimates put EU rapeseed area around 6.3–6.4 million hectares, up modestly year-on-year, while yields are expected to ease slightly from last season due to mixed winter conditions and localised frost and disease pressure. Overall EU production is forecast broadly in the 20–21 million tonne range, close to last year’s levels, keeping crushers well supplied but limiting significant surplus growth. At the same time, import requirements for 2026/27 are seen near 5.8–6.0 million tonnes, only marginally lower than the current marketing year, as biodiesel mandates and stable meal demand maintain crush incentives. Ukrainian and Australian rapeseed, alongside Canadian canola, remain key suppliers; Ukrainian FCA prices near EUR 600/t highlight ongoing competitiveness from the Black Sea corridor. On the demand side, steady EU biodiesel offtake and firm protein meal usage underpin rapeseed crush, though any weakening in diesel consumption or policy shifts on biofuels could temper demand later in the season.

Fundamentals & External Influences

The pronounced backwardation between nearby and 2027–2028 MATIF contracts reflects expectations of a looser forward balance rather than acute short‑term oversupply. Rising EU plantings, potential yield stabilisation after recent weather scares, and robust export availabilities from Ukraine and Canada all argue for improved supply beyond 2026/27. This is mirrored in the forward futures discounts of around EUR 20–50/t versus nearby positions along the curve. Externally, the rapeseed complex remains closely correlated with soy oil, palm oil and crude oil markets. Recent weakness in ICE canola futures and softer vegetable oil benchmarks has capped upside momentum in MATIF rapeseed. Meanwhile, macro factors – including uncertainty around energy markets and potential changes to EU decarbonisation and biofuel policies – add headline risk. Speculative participation appears moderate, with no clear evidence of extreme long or short positioning, which reduces the likelihood of disorderly short‑term squeezes but can also limit upside rallies without fresh bullish catalysts.

Weather Outlook

For the next 1–2 weeks, forecasts for key EU rapeseed regions (France, Germany, Poland) point to predominantly seasonal temperatures with scattered showers. This pattern is broadly favourable for flowering and early pod filling, provided rainfall is not excessive. Soil moisture across much of Western Europe is adequate to slightly above average after earlier spring rains, reducing immediate yield stress concerns. In Canada’s Prairies, canola planting is advancing under generally benign conditions, though some areas still report cool nights and localised dryness. If early‑season weather remains cooperative, markets may increasingly price in a normal to above‑average North American canola crop, reinforcing the softer tone on long‑dated contracts. For now, weather risk premia in rapeseed futures look moderate rather than elevated.

Trading Outlook & 3‑Day View

Trading implications (next 2–4 weeks)

• Producers (EU/Black Sea): Nearby MATIF and physical premiums remain attractive relative to the discounted 2027–28 curve. Consider incrementally hedging additional 2026/27 production on rallies above EUR 520–525/t (nearby MATIF), while keeping flexibility for potential weather‑driven spikes.
• Crushers: With forward futures in clear discount and Ukrainian offers competitive around EUR 600/t FCA, extending coverage into early 2027 on price dips appears reasonable. However, avoid over‑hedging if biodiesel policy or diesel demand uncertainty increases.
• Traders/Investors: The curve structure favours relative value strategies: short nearby vs long deferred positions may become less attractive if weather risks intensify; conversely, carry trades into 2027–28 could pay off if normal crops materialise and vegetable oil markets remain subdued.

3‑day directional outlook (EUR)

• MATIF nearby (Aug 2026): Sideways to slightly lower bias around EUR 510–520/t as long as ICE canola and crude oil remain under mild pressure.
• MATIF new‑crop (Nov 2026): Range‑bound near EUR 515–525/t; modest downside risk if EU weather stays benign and vegoil complex softens further.
• Physical EU/UA rapeseed (FOB/CIF, spot): Stable with slight firm tone; French FOB offers likely to hover in the EUR 630–645/t range, Ukrainian FCA around EUR 595–610/t, barring abrupt FX or freight moves.