Rapeseed Prices Recover as US Delays Tariffs on Canada – Soybeans Strengthen in Chicago

Rapeseed trading on Euronext closed mixed on Monday, with the May contract gaining €3.50 to €519/t, while new crop contracts saw mixed performance, some declining slightly while others edged higher. Meanwhile, soybeans at the CBoT saw strong gains, with the March contract rising 16.25 ct to 1,058.25 ct/bu. Both soybean meal and soybean oil also ended the day in positive territory.

US Suspends Canada Tariffs, Eases Market Concerns

Soybean trading in the US was initially boosted on Monday by the weekend announcement of a 25% import tariff on Canadian goods, which would have affected Canola oil exports to the US. This triggered a sharp increase in soybean oil prices in Chicago.

However, overnight, the US administration decided to delay these tariffs for one month after Canada agreed to strengthen border security measures. A similar agreement had previously been reached with Mexico.

The Canola market at the ICE in Winnipeg closed slightly higher on Monday, as traders hoped for a resolution to the trade tensions between the US and Canada. Early Tuesday trading in Canada saw further gains, which is a positive sign for the European rapeseed market. With Canola oil now likely to continue flowing into the US, the risk of excess Canadian supply shifting to the EU has diminished.

South American Soybean Harvest Progresses Slowly

In Brazil, the soybean harvest is gaining momentum but still lags behind last year’s pace.

• AgRural estimates that 9% of Brazil’s soybean crop had been harvested as of last Thursday, compared to 16% at the same point last year.
• Celeres raised its estimate for Brazil’s soybean production to a record 174 million tons, an increase of 3.2 million tons from its previous forecast.
• StoneX, however, lowered its estimate by 0.51 million tons to 170.89 million tons, reflecting concerns over wet conditions in key production areas.

US Soybean Exports Show Mixed Signals

According to the USDA export inspections report, US soybean shipments for the week ending January 30 totaled 1.013 million tons.

• This represents a 42% decline compared to the same week last year but a 37% increase from the previous week.
• China was the top destination, receiving 347,946 tons.
• Cumulative soybean shipments for the 2024/25 marketing year have reached 34.1 million tons, up 16% from the same period in 2023/24.

Outlook: Market Awaits US Trade Developments and South American Supply Trends

With the temporary suspension of US tariffs on Canadian Canola, market sentiment has eased slightly. However, uncertainty remains, particularly regarding the final decision on US import duties, which could still be imposed in March. Additionally, weather conditions in South America will continue to be a major factor, as harvest delays in Brazil and drought concerns in Argentina could further impact the global soybean supply.