Rapeseed, soybean prices reach unprecedented heights
Prices for both rapeseed and soybeans have been flying high since the beginning of the year. Rapeseed recently closed in the four-digit range for the first time, while soybeans also hit a record high.
Paris futures-market quotations for rapeseed have been climbing virtually unchecked for several months. The main reason for the strong price surge over the past few weeks is the crisis in the Black Sea region, which was sparked by the Russian invasion of Ukraine in February. Reports about the war in Eastern Europe fueled prices at the international futures markets every minute at a time when prices were rising anyway due to tight supply. Shortages in supply due to the absence of contractual delivery volumes from Ukrainian ports of export are now having a bearing on the entire global market. Concerns about global supply bottlenecks have also led to export restrictions or even bans, like the one the government of Indonesia imposed April 28. This situation caused rapeseed prices at the Paris stock exchange to explode.
According to investigations conducted by Agrarmarkt Informations-Gesellschaft (mbH), daily price fluctuations of up to 68 euros (USD$71.46) per metric ton were the order of the day in March. Currently, stock-exchange prices are driven by snow and cold spells in Canada, where rapeseed/canola sowings should be underway. Prices exceeded the level of 1,000 eruos per ton for the first time. More specifically, the May nearby closed at 1,064.50 euros per ton April 21. The close compares to 561.75 per ton at the same time a year earlier and as little as 366.75 per ton in April 2020. This means that stock-exchange prices almost tripled within two years.
Soybean prices in Chicago have been rising since the beginning of this year. The focus in the soybean market has been on growing and harvesting conditions in South America and the U.S., as well as brisk demand. Lack of rain diminished the yield potential of the current soybean crop in Brazil noticeably. Argentina is also likely to bring in a considerably smaller harvest than previously expected because of poor growing conditions. This drove prices at the Chicago Board of Trade to the equivalent of 590 euros per ton April 21, which was not only close to the level of 600 euros per ton, but also a new record high.