Lang
Persistent abnormally high temperatures and a severe lack of precipitation throughout the summer have led to critically low water levels across Europe's major waterways, including the Rhine, Danube, Po, and Loire rivers. This situation is significantly disrupting supply chains and energy flows, as cargo barges are currently only able to load 20-30% of their normal capacity. Consequently, freight costs have escalated sharply, causing delays in the delivery of various commodities, notably rapeseed, from domestic suppliers. Despite a surge in sales from these local suppliers in the preceding weeks, which initially led to a decrease in rapeseed quotes, the broader supply landscape remains challenging.
Further contributing to the market dynamics is the ongoing halt of sea exports of rapeseed from Ukraine, coupled with delays in supplies from local Ukrainian farmers. These factors have collectively renewed and intensified demand for rapeseed among European processors.
On the Euronext Paris exchange, November rapeseed futures saw a notable increase of 3.9% over the past week, closing at €533.25 per tonne, equivalent to approximately $617 per tonne. This upward movement was largely supported by a general rise in oil prices, even as the contract registered a 3.3% decline over the past two weeks, it still showed a 2% gain over the entire month. For August-September delivery, demand prices for rapeseed delivered to factories within the European Union held firm at €500-520 per tonne, though available acceptance capacity at these facilities is reported to be limited.
Across the Atlantic, November canola futures on the ICE exchange in Winnipeg advanced by 2.8% during the week, reaching 780 CAD per tonne, or roughly $559 per tonne. This rise partially mitigated a significant 10% drop experienced the previous week, bringing prices back to last month's levels. The weather conditions in Canada continue to be highly favorable for canola crops, maintaining a robust harvest forecast.
In Ukraine, domestic demand prices for rapeseed have shown signs of stabilization. This is attributed to active purchasing by local processors and sustained export interest at the western border. Processors offered demand prices for rapeseed delivered to factories ranging from 19,500 to 21,500 UAH per tonne. Meanwhile, exporters facilitating shipments from domestic elevators to western terminals quoted prices between 20,000 and 21,500 UAH per tonne EXW (Ex Works) elevators.
Despite limited demand at the western border, DAP (Delivered at Place) prices for rapeseed were quoted at $540-560 per tonne. Export demand prices for rapeseed from the Danube and Black Sea ports were stated at $470-490 per tonne, or 20,500-21,500 UAH per tonne. For delivery to terminals located at the western border, export prices stood at $450-480 per tonne, also equivalent to 20,500-21,500 UAH per tonne.
Amidst these market conditions, recent information indicating Turkey's efforts to broker a ceasefire in attacks on civilian ships in the Black Sea offers a glimmer of hope. This could potentially pave the way for negotiations and a possible resumption of sea exports from Ukraine in September-October. Should this materialize, Ukrainian farmers might choose to limit their rapeseed sales at current lower prices, a decision that, against the backdrop of rising stock market quotes, would further underpin and support domestic prices in Ukraine.
Source: Ukrainian Electronic Grain Exchange