With at least average canola yield in Europe, trade looks to Canada

21.08.2017

With the oilseed rape (canola) harvest largely complete in Europe, and better yields than initially predicted, attention now moves to Canada to see how the harvest there will fare after North America's spell of very dry weather earlier in the growing season.

EU trading house Gleadell reports that harvest is largely complete throughout Europe, save for some of the more northerly regions. "Short-term the market appears to have stabilised, and now all eyes turn to Canada to see how badly their crops have been affected by the hot, dry weather."

Reuters is putting the average 2017 EU-28 rapeseed yield at 3.22 tonnes per hectare. This is slightly higher than the MARS bureau's July estimate of 3.21 tonnes/ha (down 0.3% from its June estimate of 3.22 tonnes/ha), but below the EU 5- year average of 3.24 tonnes/ha.

The latest European Commission report had estimated EU-28 rapeseed production down to 21.6m tonnes, while Reuters predicted an EU rapeseed harvest of 21.3m tonnes, with a range of 20.2-23.5m tonnes. This includes 5.2m tonnes from Germany and 4.8m tonnes from France. Gleadell estimates a 22m tonne EU crop with 2m tonnes in the UK.

Matif recovers some ground

Matif November rapeseed futures had recovered from the previous low of just under E360/tonne on July 25th to reach E372/tonne on August 11th. After a sharp fall at the start of the latest week, the price recovered towards the end, with a Friday close of E367.50/tonne, a 0.25% fall on the day.

Reuters forecast a Canadian rapeseed crop of 18.4m tonnes, with a range of 16.8–21.2m tonnes. This is 1% down on its previous figure.

While cooler temperatures over the last fortnight and more rain in the central and northern prairie provinces may help canola crops there, crops nearer the US will have suffered from the hot, dry conditions this summer.

In the areas close to the US border, the good to excellent crop score drops as low as 28%, with a 5% decline in crop condition since the third week of July. This compares to 57% in Alberta, itself not a high score.

"Rapeseed in central and northern Alberta and Saskatchewan still has a possibility of improving if some precipitation falls over the next few weeks during seed development," noted Reuters. "However, if conditions remain hot and continue to be abnormally dry, deteriorating conditions will spread northward."


agrimoney

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