European Rapeseed Oil Prices Surge
It is interesting to see that as canola struggles at resistance, competing oils such as rapeseed and palm oil are showing strength.
Since mid-July, rapeseed oil futures FOB Rotterdam have traded from a low of $926.75 USD/metric ton to a high of $985.50/mt as of Sept. 17. On Nov. 6, a gain of $25.50/mt was recorded to break from this range, while a further gain of $5/mt was recorded on Nov. 9. During the past week of Nov. 2, a gain of $43.50/mt USD was realized, the largest weekly move seen since early April.
The current high is the highest level reached since May 2014. The Nov. 9 close is above the 67% retracement of the move from the 2013 high of $1,176.35/mt to the 2014 low of $635.25/mt, which is calculated at $997.79/mt, a positive signal. The long-term weekly chart shows chart resistance from $1,036/mt to $1,040/mt reached in late 2013/early 2014, which may be the next upside target.
European import data for the week of Nov. 09 shows 2020-21 imports at 2.335 mmt, down 695,000 mt from the same period in 2020-21. One thing that does jump out in this week's data is that Canada's share of the canola imported by the EU jumped from 28.2% of total imports to 31% this week, while Ukraine's share fell from 67.3% to 64.0% over the week. This covers activity over the EU crop year, which begins on July 1. According to current USDA data, Ukraine will export 2.1 mmt in 2020-21, down from 2.996 mmt in 2019-20.
The European Union's import potential bears watching in the USDA's Nov. 10 report. In October, the USDA estimated imports at 5.8 mmt, down from 6.274 mmt in 2019-20. On Nov. 9, Europe's Strategie Grains lowered its forecast from 6.3 mmt to 5.9 mmt. At the same time, the European Union released an Oilseeds and Protein Crops market Situation on Oct. 29 showing imports of 5 mmt.
European rapeseed for Feb. delivery close EUR3.25 higher this session, reaching a fresh contract high, while nearing a test of highs reached in February on the continuous active chart. This move was partially supported by Euro weakness against the USD in Monday trade.
Cliff Jamieson can be reached at firstname.lastname@example.org
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