Rapeseed production prospects are looking up

06.12.2017

World rapeseed-canola production prospects are in the midst of a bit of an upswing.

Overnight, Abares raised its estimate for Australia’s 2017-18 canola crop by 100,000 tonnes to 2.85m tonnes, citing an improvement to prospects in Western Australia, which more than offset the setbacks in New South Wales from extremes of excessive wetness, following on from drought.

“There was a cool mild finish to the winter crop season in Western Australia following widespread above-average rainfall in August,” Abares said, adding that “these conditions were favourable” for development of winter crops.

UK recovery

Meanwhile for 2018-19, Strategie Grains released its first estimate for output in the European Union, the top producer, pegged at 22.6m tonnes, which would be rise of 900,000 tonnes year on year (and, indeed, a four-year high).

This despite sowings seen little changed on last season, at 6.7m hectares.

While seedings have fallen in Germany and Poland, thanks to heavy autumn rains which hampered plantings, they have risen in France as well as in the UK, which is an even producer in yield terms when it is on song.

And the chances of that have risen thanks to an autumn, apparently, relatively free of the cabbage stem flea beetle pest which has represented a particularly big threat in the UK when conditions are right, and which is a problem especially for early-developed crops.

Data ahead

Still, at least two big tests lie ahead for market watchers.

The first is on Wednesday, when Statistics Canada unveils revised estimates for this year’s Canadian canola crop, and which traders expect to show an upgrade again, to an elevated 20.2m tonnes – getting pretty close, indeed, to usurping the EU as top grower.

StatsCan in September pegged the harvest at 19.71m tonnes, based on model-based criteria, after a growers’ survey came up with an 18.2m-tonne figure in August.

Ukraine factor

A second is how Ukraine’s 2018-19 crop fares during the winter.

Ukraine is re-emerging as a grower of the oilseed, sowings of which have been in retreat for much of the decade, in part to risks of winterkill rates far higher than those seen in the EU.

After rising by more than 60% this year to 2.1m tonnes, on International Grains Council estimates, output could jump again in 2018, with sowings (including the relatively small amount planted in the spring) pegged up 14.4% at 890,000 hectares.

This could mean a splurge in exports, given that Ukraine uses hardly of its rapeseed itself – maybe 300,000 tonnes, with its oilseed processing industry focused on sunflowers.

If Ukraine production indeed rises again, while EU import needs are stemmed by its own production growth, rapeseed prices could find it a struggle to continue their outperformance compared with values of wheat, without help from the likes of a setback in output of rival soyoil in the likes of Argentina.


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