The price of rapeseed hit its lowest price in a year last September and doesn't seem to want to climb to higher levels. Despite the current price level, European farmers have confidence in the yellow-flowering crop.
In contrast to other grains that had recently found their way back up, the rapeseed market seemed to be only declining. On Monday, September 19, the futures market for the October contract even recorded €571,50 per tonne, fueled by reports of good yields in Europe and other continents, such as Canada. In addition, prices on both the petroleum and vegetable oil markets were declining. Farmers in Ukraine also managed to harvest and exports are getting better and better despite the Russian invasion.
Unstable market
The price of rapeseed has now managed to recover somewhat, but there does not yet appear to be a clear course. At the beginning of October, a quotation of €650 even came close, but it eventually closed at €644 per tonne. This temporary revival was partly due to the trend in palm oil, the vegetable oil that also increased in price at the beginning of October. In addition, the European rapeseed market responded to that of Canada, where the price rose due to persistent domestic demand and the harvest that seemed to be lower each time.
In addition, the development of the soy harvest in the United States also influences the Matif. The harvest is going very well and is above average, which is creating resistance on the vegetable oil market. On the other hand, soybean oil inventories in the US fell to the lowest point in more than 2 years. For example, the quotation on the Matif has fluctuated around €630 in recent days and closed on Wednesday at €626 per tonne, 0,5% higher than on Tuesday, October 18.
The good yields in Europe and elsewhere as a basis and the uncertainties of the raw material markets in the world make it difficult to allow the rapeseed price to rise further. As a result, the price continues to move up and down, just as is the case with other grains. So there is no question of a stable market. Analysts are positive about the vegetable oil market for next year. Another big factor will be the development of the situation in Ukraine.
More rapeseed in 2023
Due to the cooling of the market, the mood to sow rapeseed had decreased somewhat, but considerably more has still been sown in Europe. Despite the current price level, the market prospects are still relatively high compared to two years ago. According to figures from the European Commission, 5,94 million hectares of seed will be planted for the 2022/23 season. That is almost exclusively winter rapeseed. Last season that was 5,33 million hectares, an increase of 11,5%. Other oil-bearing crops are also in demand for the coming season.
The good weather conditions have also had an impact on the sowing of rapeseed. The late summer was relatively warm in the rapeseed areas of Europe and, in combination with precipitation, this created pleasant sowing conditions. This also ensures smooth growth of the crop. This may have caused the European farmer to sow that one extra plot.