Rapeseed and Soybean Prices Under Pressure – Brazilian Harvest Prospects Weigh on Markets

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Market Performance

• Euronext (Rapeseed):
  • Rapeseed prices fell for the second consecutive day. The February 2025 contract declined by €4.25 to close at €537.50/t.
• CBoT (Soybeans):
  • Soybeans extended their losing streak, with the January contract ending just above a four-month low at 976 cents/bu (€344/t, approx. €0.344/kg).
  • Other soybean contracts also marked fresh lows during Tuesday’s session.
• ICE (Canola):
  • Canola futures declined for the fourth consecutive day. The most actively traded March contract fell by CAD 7.60 to CAD 602.50/t, a one-and-a-half-week low.

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Key Market Factors

1. Pressure from Brazilian Harvest Prospects:
   • Expectations of a record soybean harvest in Brazil continue to weigh on oilseed markets.
   • Additional rainfall expected by the end of the year supports favourable growing conditions and bolsters hope for abundant supply.
2. Palm Oil Market:
   • Malaysian palm oil prices fell for the third consecutive day due to weak demand in key export markets.
   • Palm oil is relatively expensive compared to other vegetable oils, dampening buyer interest.
   • Fundamentals, such as weaker production and the potential for Malaysian palm oil stocks to fall below 1.5 million tonnes by February, limited losses and could provide support in the coming weeks, potentially benefiting the rapeseed market.
3. Winter Rapeseed Area in France:
   • France's Ministry of Agriculture estimated the winter rapeseed area for the 2025 harvest to be 1.34 million hectares, an increase of 0.6% compared to the previous year.
4. US Soybean Export Sales:
   • The USDA reported on Tuesday:
     • 132,000 tonnes of soybeans sold to an unknown destination.
     • 187,000 tonnes of soybeans sold to Spain.

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Outlook

• Rapeseed: Prices remain under short-term pressure but could stabilize with supportive factors such as declining palm oil stocks.
• Soybeans: Brazilian record harvest expectations and weak global demand will likely keep the market bearish.
• Canola: Sentiment remains negative, though declining inventories may limit further losses.
• Palm Oil: Fundamentals, such as reduced production, could prevent additional losses and indirectly support rapeseed prices.

Global oilseed markets are currently weighed down by Brazil's supply pressures and weak palm oil demand. However, declining inventories and weather-related uncertainties could provide support in the coming weeks.

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