Unexpectedly good rapeseed harvest puts pressure on prices

Due to increasing supply from the running harvest, spot prices came under growing seasonal pressure.

In some regions, yields for wheat and rapeseed were surprisingly good, steadying the downward slide of producer prices.

At the same time, low water surcharges and rail transport made delivery to the oil mills more expensive.

Uncertainties about Ukraine’s shipping potential, the “weather market” in North America, and the ongoing harvests in Europe led to strong fluctuations at the futures exchanges.

According to Agrarmarkt Informations-Gesellschaft (mbH), the unexpectedly good rapeseed output provided scope for downward movements in price.

After market participants had anticipated sharp declines in yield due to the continuing drought and heat, achieved yields have previously been a positive surprise.

For example, according to the latest figures, French farmers harvested between 3 and 5.5 metric tons of rapeseed per hectare (2.47 acres) from their fields. As a result, market participants were cautiously positive about rapeseed supply in the current crop year.

In Germany, the rapeseed harvest was also progressing. In some locations, it was already complete. Yields were good to very good at 3.5 to 4.5 tons per hectare with up to 5.5 percent moisture content.

According to initial reports, the oil contents are between 43 and 45 percent, which is also more than satisfactory.

In some regions, harvest operations were occasionally interrupted by rain and storms, but were quickly resumed afterwards.

In contrast, demand was very low as processors were stocked up well via contracts. In other words, the prices shown do not reflect producers’ actual selling or contract prices.

However, some effort is currently needed to avoid supply gaps caused by limited freight options. Low water levels have made river transport to the inland ports much more difficult. Cargo space has been scarce and expensive, especially as high energy prices are driving transport costs anyway.

Producer prices were lowered once again in Germany in calendar week 30. They averaged 610.5 euros (USD$621) per ton, which was down 39.2 euros per ton week on week.

Prices reported by the individual German states ranged from 555 to 675 euros per ton.