07.
06.14
Canola prices plummeted

Ölsaaten Cockpit, 07.06.2014

Bullish
  • Outstanding crop risks
  • El Niño weather phenomenon
Bearish
  • Above-average oilseed crop on world level
  • Less sharply rising demand--especially from China
  • high inventories in the oilseed sector

Rape rates plummeting - for how long?

The decline of the rates of rape has inserted stopover after the changeover in April 2014 on the new crop. On the Paris stock exchange, the quotes about the whole may commuted across between 380 and €390 per t. At the turn of the month on the June 2014 the prices have resumed driving down. The Paris Bourse was quoted for the first time less than €380 per t and the courses under the €350 per t brand is moving on the Mittelland Canal.

Several reasons to turn out are for the latest development. On the decline in canola prices, the sharply fallen palm oil prices have exerted the greatest influence. Prices in Malaysia are from mid-may within 14 days by a level of $800 per t under $750 per t sunk. The reason is a seasonal again increasing production at the same time falling export, so that the inventories have risen back above the level of a whole crop. Last year, the stocks were at 150% of the production.

The prospect of an abundant soybean crop 2014 condense more and push back delivery dates of this year. The price discount to the current rate is around $80 per t. However, moving the current soybean prices at a high level as a result of the bottleneck of supply in the United States. In this respect, soybean markets initially only indirectly affect canola prices.

In Europe , an above-average rape harvesting with an early appointment of the DRUSCH grows up. It is assumed that the usual harvest pressure will occur in conjunction with an early harvest. Nevertheless the EU with rape remains deficient. The import demand will be quoted to approximately 3 million tonnes.

The worldwide production of rape should be lower 2014 to approximately 2 million tons. In a lower Canadian canola crop, the reason is essentially the record result in the previous year. For the current year, Canadian farmers have seeded less rape. The harvest estimates amount to a skimpy average value.

But the sword of Damocles of El Nino weather in the Pacific Ocean hangs over everything. Depending on the characteristics, rainfall deficits may occur there in the second half of the year, the especially Australia and can relate to the rest of Southeast Asia including Malaysia and Indonesia. The production of Palm could go back significantly. Mostly high rainfalls occur in South America which can be detrimental. In North America, it is slightly cooler than normal average rainfall conditions. But: Any El Nino phase is always something different.

Despite the uncertainties, the prevailing tenor of an above-average powered oilseed market 2014/15 with low price prospects remains.

Canola prices plummeted
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ZMP Live Expert Opinion

Strengthening prospects for an average oilseed crop in 2014/15 depresses prices. Is the pressure of the soy complex behavior, for the effect from the palm oil sector is even greater. The situation could reverse in the 2 half of the year. High soy crops could contribute to increased price pressure and may bring relief in the palm oil sector an EL Nino weather.  Despite all the uncertainties, the Outlook on low price level remains aligned.

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