Speculative Growth in Paris
On the Paris stock exchange, rapeseed prices have seen a speculative rise, increasing by 8.2% over eight sessions to reach €500.25/t or $540/t (+4.4% for the month). This growth is driven by forecasts of reduced harvests in the EU, Ukraine, and Australia.
Supporting Factors
Several factors are supporting this price surge:
- Increased Rapeseed Imports: The EU is expected to increase rapeseed imports due to a reduction in its own harvest and lower supplies from Ukraine and Australia.
- High Canadian Canola Prices: Canadian canola, which has not been exported to the EU for two years, is priced high.
- Rising Oil Prices: Oil prices have reached a three-month high, contributing to the increase in rapeseed prices.
Canola Futures and Soybean Oil
On the Winnipeg exchange, November canola futures rose by 4.1% for the week to CAD 653/t or $479/t, staying nearly flat for the month. This rise is influenced by gains in canola prices in Paris and soybean oil prices in Chicago. December soybean oil futures in Chicago climbed by 9.6% this week to $1,055/t (+8.1% for the month) due to forecasts of reduced US soybean harvests and increased processing in May and June.
Biodiesel Demand
U.S. canola and soybean oil are heavily used for biodiesel production. The increased demand for biodiesel, which has reached a 7.5-month high, is also supporting oil prices.
Rising Prices in Ukraine
- In Ukraine, export purchase prices for rapeseed delivered to Black Sea ports increased daily by 500-1000 UAH/t this week, reaching 21300-21700 UAH/t or $460-475/t.
- Domestic elevator prices also rose to 19600-20000 UAH/t EXW. Demand prices for deliveries to the EU increased by €10-20/t to €460-470/t.
Farmers are finding it more profitable to sell rapeseed at ports due to lower logistics costs and quicker payments, resulting in fewer offers for road deliveries to the EU compared to a year or two ago.
Harvest Delays and Price Impact
Rain has delayed the rapeseed harvest in Ukraine, which was expected to start 2-3 weeks earlier than usual. This delay forces traders to raise prices to accumulate enough supply to load the first ships of the season.
The speculative growth in rapeseed prices reflects the market’s reaction to anticipated lower harvests and increased demand. Stakeholders should closely monitor weather conditions and market trends to make informed decisions. The rising prices in both Paris and Ukraine highlight the interconnectedness of global agricultural markets and the impact of regional developments on international pricing.
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