Canada Markets

New-Crop August Rapeseed Reaches Fresh Contract High

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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New-crop European rapeseed led the old-crop future higher on Tuesday, reaching a fresh contract high after taking out the previous high reached on March 11. The brown line on the lower study shows the new-crop Aug/Nov futures inverse strengthening EUR 0.50 to EUR 3.25/mt. (DTN ProphetX chart)

Global oilseeds and vegetable oil markets had a positive session on April 13. While North American markets showed a focus on old-crop futures, with nearby contracts leading new crop higher, the new-crop August European rapeseed contract closed higher than the old-crop May contract and the new-crop November contract.

August rapeseed closed EUR 6.25 higher at EUR 460/mt, despite Euro strength against the USD, while reaching a fresh contract high of EUR $465.25/mt. Looking back at the continuous August contract, this is the highest trade seen for this new-crop contract since September 2012. The current move has breached the 67% retracement of the move from the July 2012 high to the July 2014 low at EUR 450.43 on the continuous August chart, with resistance seen at the weekly high of EUR 478 reached in 2012.

Also of interest, the lower study on the attached chart shows the new-crop August/November spread reaching an inverse of 10 euros on Feb. 25, while this inverse has been whittled away to a low of 2.75 euros on April 12, while strengthening to EUR 3.25 this session. Over the last five years, this spread has averaged minus EUR 3.45 on this date, with the November trading higher or at a carry to the August contract.

There is no question that traders are reacting to last week's frost event that has damaged crops in areas of central France, with one account indicating that approximately 123,500 acres may be damaged. Forecasts had been pointing to expectations of a year-over-year increase in production in order to reduce reliance on imports, with the USDA currently forecasting the EU's canola/rapeseed imports at a record 6.4 million metric tons for 2020-21. This coincides with the end of lockdowns and growth in global economies that will act as a driver of demand in the year ahead.

In related news, a recent USDA attache report points to Ukraine's potential to slightly increase rapeseed production in 2021, although increased domestic processing is expected to limit potential exports to 2.280 mmt in 2021-22, down for a second year and would be Ukraine's smallest exports in four years.

Another USDA attache report has forecast that Australia will produce 3.9 mmt of canola in 2021-22, down only 100,000 mt from the current crop year, while estimating exports at 2.9 mmt, unchanged from its forecast for 2020-21 while the official USDA forecast includes exports of 2.7 mmt for the current crop year.

Yet another USDA attache report on Malaysian oilseeds points to a 500,000 mt increase in forecast Malaysian palm oil production for 2021-22, while "is based on assumption that the industry will be able to recruit new laborers by the end of 2021, as in international borders reopen."

A quick update of data tables based on the USDA's April World Agricultural Supply and Demand Estimates (WASDE) report shows the global stocks/use ratio of the major global vegetable oils falling from 12.1% in 2019-20 to 10.9% in 2020-21, which is the tightest seen since the 1997-98 crop year.

Cliff Jamieson can be reached at

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