Oilseed Markets Under Pressure: South American Harvest Booms While Middle East Tensions Ease

Oilseeds Market Report

On Tuesday, the oilseed markets experienced downward pressure, driven by strong harvest prospects in South America. The stabilization of crude oil prices reflected easing geopolitical tensions in the Middle East.

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Rapeseed Market

Rapeseed prices at the Euronext reversed some of the gains from the previous days:

• February Futures: Fell by 2.25 EUR to 540.75 EUR/t on Monday.
• The market was influenced by weaker soybean complex prices in Chicago, which pressured rapeseed values globally.

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Soybean Market

Soybean prices declined as improved harvest expectations in Brazil weighed on sentiment:

• CBOT January Futures: Closed down 11.25 ct at 998.5 ct/bu (≈ 367.6 EUR/t).

Brazil's soybean production outlook:

• AgRural: Reported substantial progress in planting activities.
• ABIOVE: Forecasted a record production of 167.7 million t.
• CONAB: Estimated slightly lower at 166.14 million t.
• USDA: Predicted 169 million t, reflecting a consistently higher evaluation of Brazilian harvests compared to local authorities.

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Canola Market

Canola futures in Canada also faced declines:

• ICE January Futures: Dropped below the critical 200-day moving average for months, a fundamental support level.
• Contributing factors:
  • Falling soybean oil prices in Chicago.
  • A stronger Canadian Dollar makes exports less competitive.

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EU Oilseed Imports

European Union import data revealed increased demand for oilseeds:

• Rapeseed Imports:
  • Cumulative imports for the marketing year: 2.337 million t, up 16% year-over-year.
  • Germany's imports reached 450,000 t, a weekly increase of 43,000 t.
• Soybean Imports:
  • Cumulative imports: 4.754 million t, up 9% year-over-year.
  • Germany imported 912,000 t, compared to 810,000 t the previous week.

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Palm Oil Market

Palm oil futures in Malaysia showed a partial recovery:

• February Futures: Rose 23 MYR (+0.47%) to 4,922 MYR/t (≈ 1,100.87 USD/t) after a sharp 3% drop on Monday.
• However, prices faced renewed pressure on Wednesday morning, with signs of bearish sentiment.

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Crude Oil and Geopolitical Influence

Crude oil prices remained subdued on Tuesday, offering little support to oilseed markets:

• After rising on Monday due to fears of an escalation in Ukraine, Tuesday saw stabilization:
  • IAEA Announcement: Iran agreed to suspend enriched uranium production.
  • Reuters Report: Hezbollah accepted a U.S.-mediated ceasefire with Israel.

These developments are expected to reduce geopolitical uncertainty in the Middle East, contributing to calmer energy markets.

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Conclusion

The oilseed markets are grappling with bearish factors:

1. Strong Harvest Expectations: South America’s record soybean production weighs on prices.
2. Weakening Soy Complex: Lower soybean oil prices and unfavourable currency shifts impact global oilseed markets.
3. Stabilizing Crude Oil Prices: Geopolitical tensions in the Middle East are easing, reducing the risk premium in energy markets.

Short-term dynamics suggest continued price pressure, with global supply expectations and geopolitical stability pivoting in shaping the market outlook.