Weather Turbulence Fuels Volatility in Rapeseed and Canola Markets -Rapeseed Prices Under Pressure as Canadian Harvest Progresses

Rapeseed Prices Under Pressure as Harvest Progresses in Canada

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Price Movements

Rapeseed (canola) futures on the Chicago Mercantile Exchange (CME) showed a mixed performance today, pressured by harvest progress in Canada and weather developments in Brazil. The November contract dropped by €5.00, closing at €468 per tonne (equivalent to 0.468 EUR/kg), while Winnipeg canola futures rose CAD 6.50 to close at CAD 580.90 per tonne due to weather delays.

Fundamentals

Canada, the world’s largest exporter of rapeseed, has made significant progress in its harvest, now reaching 60% completion. While this harvest surge initially pressured prices, recent rains in the western provinces have delayed further progress, lending support to the Winnipeg market. However, global rapeseed prices remain under pressure due to abundant supplies from other regions, particularly the EU.

Key Factors

  • Canadian Harvest: The ongoing Canadian canola harvest is expected to yield strong production volumes, adding to the global supply glut. As harvest operations progress, prices are likely to face continued pressure unless weather-related delays become more pronounced.
  • European Supplies: Rapeseed production in the EU is expected to reach high levels this season, providing additional downward pressure on prices as European exporters increase their market share.
  • Brazilian Weather Concerns: Weather conditions in Brazil are being closely monitored as rapeseed planting begins. Dry conditions in Mato Grosso and other key regions could lead to delays, adding potential volatility to the global market.

Technicals

The November rapeseed futures have tested support at €468 per tonne (0.468 EUR/kg). If this level breaks, the next significant support is at €460 per tonne. Resistance remains at €475 per tonne, and any weather-related delays in Canada or Brazil could spark a rebound towards this level.

Mintec Global

Outlook

Rapeseed prices are likely to remain under pressure due to the Canadian harvest and strong European supplies. However, the market remains sensitive to weather-related risks, particularly in Brazil and Canada, where any further delays could limit supply and drive prices higher. Market participants should also watch for potential shifts in global demand, particularly from China, which could provide additional support.

 

 

 

 

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