Rapeseed Climbs for Fifth Consecutive Day – Supported by Soybean Rally

Market Performance

Rapeseed on the Euronext closed higher for the fifth straight session on Friday. The February contract gained €9.25, finishing the day at €542.50/t. This marks a weekly increase of €32.25 (6.3%), as the rapeseed market tracked the strength in soybeans at the Chicago Board of Trade (CBoT). The January soybean contract jumped by 21.25 cents to 1,013.50 cents/bu (€364/t), achieving a weekly gain of 32.50 cents (3.3%).

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Key Drivers

1. Surge in Soybeans and Soy Oil:
   • Rapeseed prices were buoyed by the rally in soybeans and particularly soy oil on the CBoT, which rose by approximately 6%.
   • Canola prices in Canada also surged, driven by the bullish WASDE report, which revealed a worse-than-expected soybean harvest in the United States.
2. WASDE Report Highlights:
   • The USDA reduced the average yield by 1 bushel to 50.7 bu/ac, falling short of expectations.
   • Harvested acreage was trimmed by 250,000 acres to 86.05 million acres, resulting in a 95-million-bushel cut to total production, now at 4.366 billion bushels (118.8 million tonnes).
   • Global soybean production estimates were revised downward by 3.5 million tonnes to 128.4 million tonnes.
   • U.S. ending stocks for 2024/25 were revised upward to 10.3 million tonnes, while global stocks fell to 128.4 million tonnes (down from 131.9 million tonnes in December). Analysts had anticipated an increase to 132.2 million tonnes.
3. Weak Export Data:
   • The weekly export sales report showed disappointing results, with soybean sales reaching a seasonal low of 288,671 tonnes (below the forecast range of 400,000 to 1.3 million tonnes).
   • Soymeal sales totalled 144,918 tonnes, also the lowest this marketing year.
   • Soy oil sales were reported at 34,634 tonnes, within the expected range of 20,000 to 60,000 tonnes.

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Outlook

• Bullish Momentum: The unexpected revisions in the WASDE report, particularly to U.S. yields and global stock estimates, provide significant support to oilseed markets.
• Market Factors: While weak export data remains a concern, the overall bullish sentiment is sustained by robust demand for biodiesel and weather conditions in South America.

Rapeseed continues to benefit from strong fundamentals in related markets, suggesting the potential for further gains if positive drivers persist.

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