Estimate adjustments and quality concerns impact rapeseed production
Concerns have continued to mount about rapeseed production and harvests, with recent insights from Mintec's survey of market players revealing a notable shift in estimates. The European rapeseed crop is now projected to fall within the range of 19 to 19.3 million metric tonnes, with the UK contributing an expected 1.3 million metric tonnes. This cumulative total of approximately 20.45 million metric tonnes is in contrast to earlier season forecasts, which had initially placed estimates between 21 and 21.5 million metric tonnes.
This adjustment in estimates comes alongside a growing apprehension about crop quality in key regions, notably France and Germany. Unusually heavy rainfall has led to harvest delays, rendering the crops susceptible to moisture and pest damage. Not only is production lower than anticipated, but these quality concerns also hold the potential to exert influence on the market dynamics ahead. Should these indications hold, they could precipitate upward price pressures in the rapeseed market, according to market players.
Meanwhile, another factor contributing to potential price increases lies across the Atlantic. In Canada, key rapeseed growing areas, like Saskatchewan, are persistently grappling with hot and dry conditions despite sporadic rains. Mintec's recent survey of market players, reflecting market sentiment, maintains the previously reported production estimate of 14 to 16 million metric tonnes for this region, a deep decline from Canada’s usual production of 18 to 20 million metric tonnes.
The constraints within the rapeseed market are evident across weeks of observation. Prolonged rainfall has hindered harvest efforts in France and Germany, with about 12% of the harvest incomplete in France and limited activity observed in Germany. While demand for French seeds is somewhat tempered by pricing considerations, an exception is a robust interest in GHG rapeseed, spurred by attractive margins for German crushers.
Adding to the complex landscape are competitive pricing dynamics. Seeds from Ukraine are priced significantly lower on a DAP basis—around €80 to €100/mt lower than MATIF futures prices. However, recent developments, such as the closure of the grain corridor deal on 17th July and disruptions to Danube ports that Ukrainian traders relied on, have constrained export options. The prevailing sentiment among many EU players is that Ukrainian traders are shifting their focus towards marketing goods within the EU, potentially pressuring prices downward. Should this trend persist, it might prompt players to compete aggressively or withhold seeds, anticipating future price increases due to limited availability.
As harvest outlooks dim, the rapeseed market remains tied to unpredictable weather, quality variables, and evolving trade flows – collectively shaping an uncertain future for both seed and oil.
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