Poor weather in the Canadian Prairies during June and the start of July has raised concerns surrounding rapeseed yields. The crop was affected by lower rainfall and higher temperatures, subsequently supporting Canadian rapeseed prices since early July. The ICE price increased 8.6% from the beginning of July to CAD 881/MT on 22nd July. Global palm and soyabean oil markets were also supported as part of a knock-on effect within the vegetable oils market, with palm oil showing slower output growth, and forecast for dry weather affecting US soyabean supply over the period.
The poor weather has been consistent across all of the prairies (Alberta, Saskatchewan and Manitoba), meaning good quality crops have been sparse, whereas typically some areas of the prairies perform better than others. Throughout June, severe drought was recorded in Saskatchewan, while Manitoba reported severe-to-exceptional drought conditions. The situation in Alberta is less severe, although reported to be gradually worsening. All these provinces have been marked with drought-intensity grades of D2 or D3, with D2 signifying a drought event that occurs every 10 or 20 years, while D3 represents a drought event that happens once every 20+ years. This means that rapeseed crop ratings have reached their lowest level in years, if not ever.
This has come as a shock to the Canadian rapeseed market, which had fallen since May in line with an increase in planted area and expected yields, as well as weakening demand from a global resurgence in COVID-19 cases.