Rapeseed Futures at Euronext Decline Amid Chinese Export Restrictions and Soy Market Volatility

After three consecutive days of gains, rapeseed futures at Euronext ended lower on Wednesday. The most-traded May contract fell by €5 to €523.50/t, while the front-month February contract closed at €521.25/t, also down by €5.

At the CBoT, soybeans also declined, with the March contract losing 11.25 cents to 1,056 cents/bu (€373/t). Soybean prices were weighed down by a sharp decline in soy oil, which tracked weaker palm oil prices in Malaysia. Palm oil futures in Kuala Lumpur fell to their lowest level in two weeks.

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Market Drivers

Rapeseed Market

• Euronext: Despite Wednesday's losses, financial investors remain optimistic about rapeseed. Recent data shows that net long positions in rapeseed futures and options increased to 54,653 contracts (up from 53,367 contracts the previous week). This reflects continued bullish sentiment for the medium-term price outlook.
• ICE Winnipeg: Canadian canola remains under pressure as traders remain concerned about potential export barriers to the US if the Trump administration implements proposed tariffs. Such tariffs could disrupt canola oil exports to the US.

Soybean Market

• China and Brazil: The market is reacting to reports of quality issues in Brazilian soybean exports. Chinese authorities have temporarily banned five Brazilian exporters after finding contaminants in shipments. This development could disrupt Brazil's exports, particularly as its harvest is just beginning and China is its largest buyer.
• South American Weather: Heavy rains in Brazil are causing harvest delays, while ongoing drought in Argentina continues to impact yield expectations. These contrasting weather conditions add uncertainty to the global soy market.

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Current Price Developments (as of January 24, 2025)

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Outlook

The soybean market remains highly volatile, driven by uncertainties surrounding China's export restrictions and potential US tariff hikes. Harvest delays in Brazil and reduced export volumes could provide support to prices. For rapeseed, despite short-term losses, the tight global supply is expected to limit declines and support prices in the medium term.

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