Rapeseed Futures Close Higher Amid Canola Gains and South American Developments
Rapeseed Futures Close Higher Amid Canola Gains and South American Developments
Rapeseed futures at Euronext ended Thursday's session with gains. The May contract, the most traded, rose by €1.50 to close at €528.50/t. Meanwhile, soybeans and soy oil at the CBoT posted notable gains, with the March soybean contract climbing 9.5 cents to 1,077.5 cents/bu. Soy meal prices were mixed.Market Drivers
South American Soy Complex
- Argentine Tax Cuts: Late on Thursday, the Argentine government announced significant cuts to export taxes:
- Soybean export taxes were reduced from 33% to 26%.
- Export taxes for soy oil and soy meal were reduced from 31% to 24.5%. These changes aim to enhance Argentina’s global competitiveness as the world's largest exporter of soy oil and soy meal.
- Weather Concerns: The Buenos Aires Grain Exchange lowered its forecast for Argentina's soybean harvest by 1 million tons to 49.6 million tons, citing ongoing drought conditions. This revision provided support to the soybean market earlier in the session.
- Brazil-China Tensions: Chinese authorities have banned five Brazilian exporters due to contamination issues in soybean shipments. The Brazilian government confirmed the bans, attributing them to isolated cases and emphasizing minimal impact on overall exports to China.
Rapeseed and Canola Markets
- Canola Strength: Canadian Canola futures closed higher, driven by robust Chinese demand, low inventories, and restrained farmer selling. However, concerns over potential US tariffs on Canadian imports and reduced biofuel subsidies for rapeseed in the US limited gains.
- European Rapeseed: Euronext Rapeseed followed the strength in Canola but remained under pressure due to global uncertainties.
US Export Data Awaited
Due to Monday's public holiday, the USDA export sales report will be released today. Market expectations include:- Soybean sales: 600,000–1.8 million tons.
- Soy meal sales: 100,000–450,000 tons.
- Soy oil sales: 10,000–60,000 tons.
Euronext Rapeseed Futures Prices (as of January 24, 2025)
Outlook
The rapeseed market remains influenced by global developments, including South American weather, Chinese export restrictions, and policy changes in Argentina. While gains in Canola and strong demand for biofuels provide short-term support, global trade tensions and competition from lower-cost soy products could weigh on prices.Click here to reach our trading platform CMBroker
