European Markets See Price Swings

Rapeseed prices in Europe had a turbulent start to January. Reduced shipments from Ukraine and delayed deliveries from Canada and Australia caused fluctuations. At the same time, colder-than-expected weather in the US drove up crude oil prices, boosting biofuel demand in the EU and offering support to rapeseed prices.

Prices rose 2.5% on the year’s first trading day but dipped for the next three days. By the end of the week, prices recovered with a 1.7% weekly gain, closing at €533.25/t or $548,6/t for February futures.

Crude Oil Pushes Prices, but Canola Faces Pressure

In early January, March Brent crude prices climbed 4% to $77 per barrel, which lent support to rapeseed prices. Meanwhile, in Canada, March canola futures on the Winnipeg Exchange fell 0.5% to CAD 625/t or $434/t. Concerns over possible US tariffs on canola oil imports weighed on prices.

Uncertainty about US trade policies and speculation around Canada’s political standing added further pressure. The Canadian dollar also weakened, reaching CAD 1.44/$.

Export Opportunities for Canadian Canola

The price gap between Canadian canola and European rapeseed widened to $115/t. This gives Canadian exporters a competitive edge in the European market, allowing them to take advantage of the price difference despite ongoing challenges.

Traders Await Key USDA Report

All eyes are on the USDA’s January report, which may revise projections for Australia’s canola crop and global soybean use. A larger-than-expected Australian harvest or reduced consumption could push up global inventories, which might pressure canola prices further.

Conclusion

Rapeseed and canola markets are navigating through shifting conditions. While European rapeseed prices have shown some recovery, Canadian canola is facing headwinds due to trade concerns and weak demand. The upcoming USDA report is expected to provide more clarity on market trends, helping traders understand what to expect in the coming weeks.





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