Volatile Movements in Rapeseed and Soybean Markets
Rapeseed: Rollercoaster Ride for February 2025 Contract
The
February 2025 contract on Euronext experienced extreme volatility during the holiday season. Before Christmas, rapeseed prices stabilized around
€520/t, only to surge significantly on Christmas Eve, with a daily movement of over
€15/t. On the following trading day, Friday, December 27, prices initially climbed but saw a massive drop. The gains from the previous day were erased and extended into a steep
€20/t loss in a single day. The downward trend continued into Monday and Tuesday, with prices eventually plummeting to
€210/t.
Soybeans: Resilience Amid Volatility
Unlike rapeseed, soybeans remained resilient. After the
March 2025 contract hit a new low before Christmas, the market rebounded sharply between the holidays, reaching a
one-month high of
1,010 cents/bu (
€358.74/t).
South American Weather Conditions
Weather developments in South America have been a key focus:
- Argentina: Persistent dryness and no rain in the forecast have created crop stress. The Buenos Aires Grain Exchange has reduced the estimated planting area by 0.2 million to 18.4 million hectares, with 85% of planting completed (up from 77% the previous week).
- Brazil: Weather conditions are mixed. While most regions report satisfactory conditions, southern areas are experiencing drought, and eastern areas face excessive rainfall with flooding risks. Timely rain by mid-January will be critical to avoid crop stress.
- Export Outlook: Conab estimates Brazil’s soybean exports for the current season to be 105.5 million tonnes.
Production Estimates
- USDA (Brazil): Soybean production is estimated at 169.0 million tonnes, up from 153.0 million tonnes last year.
- USDA (Argentina): Production is forecast at 52.0 million tonnes, compared to 48.2 million tonnes last year.
US Soybean Oil Developments
Two key factors supported soybean prices:
- Export to India: The USDA announced the sale of 28,000 tonnes of soybean oil to India, which is reflected in higher soybean prices.
- Biofuel Demand: The EIA reported a 14% increase in soybean oil consumption for biofuel production in October 2024, exceeding the previous year by 15.5%.
- Biodiesel and Renewable Diesel: Combined production rose 4.1% to 460 million gallons, the second-highest level on record.
Conclusion
The rapeseed market experienced significant volatility, driven by speculative movements and market adjustments. Meanwhile, soybeans found support from weather concerns in South America and strong demand for soybean oil in biofuels. For upcoming price directions, market participants will closely monitor weather patterns in South America and further developments in global oilseed markets.
