Rapeseed Shortage Looming?
01/06/11 -- With an estimated crush of around 23 MMT in 2011/12 Europe could do with a bumper rapeseed crop this year, unfortunately it doesn't look like it's going to get it.
Oil World peg the 2011 EU-27 rapeseed crop at 19.2 MMT (down 6.8% on last year), with sharp falls coming from Germany, Poland and France. The German crop will be down 19% from last year at at 4.65 MMT, they say.
Toepfer agree, pegging German output at 4.4-4.8 MMT vs 5.7 MMT a year ago, a decline of between 16-23%.
In Poland GUS, the Central Statistical Office, say that winter rapeseed plantings fell 12.5% as a result of the exceptionally wet conditions in August and September. In addition the hard winter then killed off 15.7% of those fields that did get planted, they add.
My man in Romania, Europe's fifth largest producer, says that OSR potential in the south is looking particularly poor and that a "severe shortage of rape" is likely there in the coming season.
Meanwhile wet weather and flooding in Canada also is delaying planting of spring rapeseed for the second year in a row. Take a look at this short video here from my mate Brad in Saskatchewan.
Record UK Rapeseed Crop In Store
28/03/11 -- A 9.2% jump in plantings to 696,000 ha will see the UK harvest a record 2.325 MMT of rapeseed this year, according to Coceral. The area estimate is very much in line with that of Defra, although they haven't put an figure on production yet.
Coceral are using a yield estimate of 3.34 MT/ha, 3% lower than last season's 3.45 MT/ha, if we were to match last season's yield then we'd potentially be looking at a crop of 2.4 MMT.
Coceral see the overall EU-27 rapeseed crop broadly unchanged on last year at 20.2 MMT, with output in France at 4.97 MMT (up 6.7% on 4.77 MMT last year), Germany at 5.15 MMT (down 10% on 5.75 MMT last year) and that of Poland at 2.18 MMT (up 3.8% on 2.11 MMT last year).
Achtung Baby
17/11/10 -- The gun-jumping, rule-loving Germans appear to have shot themselves in the foot by deciding to implement the the EU's Renewable Fuels Directive at the first available opportunity - Jan 1st next year.
Only their best mates Austria are doing likewise, whist the rest of Europe busy themselves with thinking about it. "There's so much to do at this time of year isn't there, with presents to wrap and everything," said one MEP. "We'll have a look at the job in the New Year once the kids go back to school," he added.
By introducing the new ruling Germany's rapeseed and rapeoil imports must conform to the legislation that stipulates that all such raw materials must come from certified sustainable farms. And right now those are pretty few and far between across the rest of Europe.
The German oilseeds industry association Ufop would like us laggards to get our fingers out and implement the directive ourselves asap. As without the necessary paperwork German imports could grind to a half shortly after Christmas. Ho, ho, ho.
Meanwhile Ufop are forecasting a German rapeseed crop of 5.5-6.0 MMT in 2011 (compared to 5.7 MMT this year), which is better than most other forecasts of a reduction of up to 10% on the back of a reduced area due to saturated soils at planting time.
Interesting Statistic
02/11/10 -- The USDA currently estimate that Europe will consume almost 22.7 MMT of rapeseed this season. That's nearly 2.7 MMT more than we have just produced.
European rapeseed production has now been lower than domestic consumption of the oilseed in seven out of the last eight seasons.
Keep An Eye On Rapeseed
The rapeseed market is developing into a very interesting one. Reports from the Ukraine Ag Ministry now suggest that as at 15th April 433,700 ha of winter rape has been lost to the harsh winter. That represents almost a third of the entire planted area, and is up sharply from an estimated 15% just two weeks previously.
A further 188,000 ha is in weak or thinned condition, they add.
Whilst much of the lost area is likely to be replanted with spring rape, it would seem that yields are likely to be potentially seriously threatened this year. Further concerns over output must also come from reports of urgently needed agrochemicals being held up at the border in a dispute over newly introduced import regulations.
The vast majority of Ukraine's rapeseed crop is normally exported to Europe.
Meanwhile Agrimoney.com report that in 2010/11 EU-27 rapeseed production "will fall nearly 2.9m tonnes short of consumption, a deficit 500,000 tonnes bigger than that in 2009-10."
That could take EU-27 ending stocks for 2010/11 to a very tight eighteen and a half days of supply, according to the USDA.
Those figures however appear to assume that the loss of demand from the Bunge plant at Mannheim, will be taken up by other processing facilities elsewhere in Europe. There certainly seems to be plenty of spare capacity around at the moment.
EU Rapeseed Outlook
EU rapeseed production in 2010 is seen slightly lower than last year, despite a 5% increase in planted area.
Coceral say that we will produce 20.77 MMT this season, around half a million tonnes or 2.6% down on 2009. Planted area will be 6.8 million hectares they say, up more than 300,000 ha, but yields will fall to 3.05 MT/ha from a bumper 3.29 MT/ha in 2009.
Oil World concur, saying that EU-27 output will come in at 21 MMT, 2.4% down on last year. The key driver seems to be an anticipated return to normal yields in France and Germany from the records witnessed twelve months ago.
France saw yields average 3.78 MT/ha last season, whilst in Germany they broke through the four tonne mark coming in at an unprecedented 4.29 MT/ha, according to Coceral.
Of course it's early days yet, nobody was forecasting anything like those kind of yields this time twelve months ago either.
Strong demand looks set to continue to support prices, with Oil World pegging the 2010/11 EU-27 crush at 23.3 MMT, up 2.5% from 2009/10. They say that the EU-27 will import 3 MMT of rapeseed in the coming season, although potential changes to legislation may make it more difficult for some exporting countries to gain access to EU homes.
EU rapeseed is the only product in the grains/oilseeds sector to have risen during 2010. May Paris rapeseed closed at EUR307.00/tonne last night, EUR15 higher (+5%) than the 31st Dec 2009 close of EUR292.00/tonne.
Oil World Increases EU Rapeseed Crop Estimate
With the EU-27 rapeseed harvest done and dusted, Oil World have increased their production estimate to 21.1 MMT, 0.8 MMT up from their previous forecast of 20.3 MMT and 11.6% higher than the 18.9 MMT produced in 2008/09.
Output in Europe's largest producer Germany is now seen at 6.3 MMT (5.2 MMT in 2008/09).
Elsewhere, in France production is now pegged at 5.6 MMT (4.7); in Poland at 2.4 MMT (2.1), in the UK at 1.9 MMT (2.0), and in the Czech Republic at 1.1 MMT (1.1).
Coceral Peg UK Rapeseed Crop At 1.77 MMT
Coceral peg the UK rapeseed crop at 1.77 MMT this year, almost a quarter of a million tonnes lower than the NFU estimated last week, and last year's crop which came in a tad under 2 MMT.
"The NFU they, er, don't know their, how you say, ass from an olé in the ground," a Cocereal spokesman didn't say.
Coceral put the French crop at 5.4 MMT (from 4.7 MMT in 2008), the German crop at 6.2 MMT (5.2 MMT) and the Polish crop at 2.4 MMT (2.1 MMT).
Total EU-27 rapeseed output is seen at 20.55 MMT, an 8% increase on last season's 19.02 MMT.
EU Rapeseed Production
Oil World has left it's estimate for the 2009/10 EU-27 rapeseed crop unchanged at 20.3 MMT, a 7.4% increase in the 18.9 MMT produced in 2008/09.
EU-27 imports are now seen at 1.9 MMT, down from last month's estimate of 2.2 MMT, and 40% lower than the 3.2 MMT imported in 2008/09.
Crush is estimated at 21.3 MMT, 1 MMT up on last month and 5.4% higher than last season's 20.2 MMT. Ending stocks are now forecast at 1.3 MMT, from 1.2 MMT last month and 1.6 at the end of 2008/09.
It's early days yet, but I'd expect 2010/11 production to be significantly higher again not just here in the UK, but also in Europe and Ukraine. I'll go for 22-22.5 MMT next season.
EU-27 Rapeseed Crop Pegged At 19.7 MMT
The US agricultural attaché estimates the EU-27 rapeseed crop at 19.7 MMT, up 0.5 MMT from his previous estimate, and 18.9 MMT in 2008.
Total domestic use is seen at 21.8 MMT, he says, broadly similar to last season's 21.7 MMT. This should lead to ending stocks of 1.3 MMT, he says.
Rapeseed meal output this season should reach 12.0 MMT (up from 11.6 MMT last year).
Rapeseed oil output is estimated at 8.6 MMT, up from 8.4 MMT a year ago.
UK Rapeseed Production Down 20 Pct
The EU-27 will produce 17.92 MMT of rapeseed in 2009/10, say Copa-Cogeca. That's a reduction of around 900,000 MT, or 4.7%, on last season.
Output in the UK will be 1.574 MMT, they say, 20% down on last year's 1.973 MMT, with yields coming in at 3 MT/hectare, down from 3.3 MT/hectare a year ago.
Production in Germany is seen flat at 5.171 MMT, compared to 5.155 MMT a year ago, and in France they estimate output at 4.555 MMT, marginally lower than 4.719 MMT in 2008.
Dryness Poses Early Threat To EU Rapeseed Production
The EU's top four rapeseed producing countries France, Germany, Poland and the UK account for more than 75% of the region's entire output.
All four country's have seen winter rapeseed emerge from dormancy against a background of drier and warmer than normal spring conditions. Since the start of April temperatures have been have been as much as 15ºF above normal, especially across Germany, say StormX.
Many parts have also been drier than normal, with the UK, for once, one of the driest:
Over the next 7 days, there is the potential for around a inch of rain in the major rapeseed areas of northeastern France and southeastern Germany. However, Britain, most of Poland and the rest of France and Germany should see much lower amounts, they forecast.
EU Rapeseed Crush Up 10 Percent
Oil World says that the EU-27 rapeseed crush in the current 2008/09 marketing year which runs July/June will total 13.7mmt, a 10% increase on last season's 12.4mmt.
Rapeseed oil supply is seen increasing 8% to 8.4mmt from 7.8mmt a year previously.
Total rapeseed use is forecast up 9% to 8.5mmt, with 5.3mmt of that going into biofuel production.
EU Rapeseed Production 19MMT - Oil World
Oil World projects EU rapeseed production in 2008/09 (July/June) to amount to 19.0 mln tonnes which is 0.7 mln tonnes above the 18.3 mln t of the previous year. Germany is expected to produce 5.2 (5.3) mln tonnes and France 5.0 (4.7) mln tonnes. Imports into the EU are forecast at 1.7 mln (690,000) tonnes and crush at 19.4 (18.4) mln tonnes.
World rapeseed supply and demand 2008/09
Informa this month pegged world rapeseed production at 51.5 million tonnes, an increase of 4.2 million tonnes on last year's 47.3 million tonnes.
Oil World expects the world to crush 49.9 million tonnes of rapeseed this year as compared to 48.3 million tonnes last year.
Significant production increases are seen coming from Australia (1.7 million tonnes compared to 1.1 million tonnes in 2007) and the Ukraine (2.5 million tonnes vs 1.1 million tonnes last year).
Informa says that the Ukraine will have up to 2 million tonnes of non-GMO rapeseed to export this year.
Statistics Canada is predicting that Canadian farmers will plant a record amount of canola this year. Informa is forecasting the Canadian canola production number will hit 10.3 million tonnes versus 8.8 million tonnes last year.
The Chinese Minstry of Agriculture and Informa are pegging this year’s Chinese winter rapeseed crop at 11.85 million tonnes this year. That is up 3.8% over last year.
EU-27 production is seen around unchanged depending on who's figures you rely on.
The USDA is forecasting an 18.9 million tonne EU-27 rapeseed crop this year. Toepfer thinks this is optimistic and thinks the number will be closer to 18.3 million tonnes, whilst Oil World sees Europe producing 18 million tonnes of rapeseed this year versus 18.2 million tonnes last year.
Oil World says there is a high probability that oilseed prices will continue to trend lower in the short term unless there is a crop production issue.
So there you have it. According to Oil World & Informa we have a world 4.2 million tonnes production increase partially offset by an extra 1.6 million tonnes of crush, leaving 2.6 million tonnes surplus to requirements.
An amount, maybe coincidentally, maybe not, almost exactly that of the entire production of the Ukraine.
Is it just me or do you feel a bit sorry for Ukraine? We told them we were desperate for wheat & rapeseed this year, they go and produce millions of tonnes more of the stuff, and now we don't want it!
I feel a bit like you do when you're in an Indian restaurant late on and there are some lads in a bit rowdy and p*ssed up. They order everything on the menu then sneak out thirty seconds before it arrives.
They won't fall for that one so easily again next year will they? Still there's always Eurovision 2009, bless.
So, the next time you hear the old "we just can't buy the seed" line, toss them this....
EU Rapeseed Market 'In Free-Fall'
Rapeseed futures on the Paris-based futures market continue their alarming fall today with November EUR12 lower at EUR398/tonne.
The contract has fallen EUR80 in a little over a month and is already EUR40 below Friday's high.
"With the French well into their new-crop, and Chicago falling out of bed, the market is in free fall," said one trader.
In the UK the harvest has only just started but reasonable yields and oil levels are being reported in early cut seed. UK delivered prices have fallen around £40/tonne in a week with new crop straight off the combine now down to around £300 delivered, reports one trader. £327 delivered traded as recently as Monday morning, he added.
EU Rapeseed Futures Dive, So Why Isn't Meal Following Suit? Is It Really All Down To Oil?
With the rapeseed harvest well underway in France EU rapeseed futures prices have plummeted recently. The Nov future price has fallen from a recent high of EUR478 set on 16th June to EUR422 this morning.
Indeed, the Nov future closed EUR7.25 lower Friday and is currently down a further EUR10.25 today. That's EUR17.50 in a couple of days. It's somewhat surprising therefore that rapemeal prices today are only £1-2 lower than Friday morning.
Since June 16th seed prices have fallen EUR56/tonne, which is the equivalent of £44.50, yet UK crusher meal prices today are only around £10 lower during the same period.
Ah, its all down to the price of rapeoil the crushers would say.
Fair enough the price of rapeseed oil is substantially lower than 16th June. So lets do the calculations. I've used Liverpool prices just because the oil price there is more readily available to me. For what it's worth Liverpool rapemeal is actually down GBP 2 more than Erith since June 16th:
16th June: Nov rapeseed future EUR478, Nov rapeoil GBP858, Nov rapemeal GBP181.
Rapeseed at EUR478 = GBP382.50 (using a ballpark exchange rate of 0.80 euros/pound).
One tonne of rapeseed yields approx 40% oil and 55% meal and 5% "waste".
So on 16th June with Nov oil at GBP858 and meal at GBP181 we have a "theoretical" crush margin of GBP60.25 over the futures price (858x40/100 plus 181x55/100 minus 382.50).
At today's rates the sums are rapeseed=GBP337.50 (422x0.80). So the same margin over futures price has risen by more than GBP11/tonne (789x40/100 plus 170x55/100 minus 337.50) = GBP71.60.
If today's margin over futures price was still GBP60.25 then the price of November Liverpool rapemeal would be GBP150.45, nearly GBP20 LOWER than it actually is!
Yes I do fully realise that the physical price of seed delivered into Liverpool isn't the same as the Paris futures price, so please don't ring/email me to point that one out! What I am saying is that based on the decline in seed futures over the last month, and allowing for the decline in oil price, meal should be substantially lower than in fact it is. Discuss.
Oil World estimates global 2008/09 rapeseed production at 52.4MMT up 4.3MMT
Oil World -- 2008/09 world rapeseed production is estimated at 52.4 mln t, up from the 48.1 mln t produced one year earlier.
In the EU-27 18.1 (18.17) mln t are expected, in Canada 9.4 (8.8) mln t, in Ukraine 2.4 (1.1) mln t, in China 11.3 (10.4) mln t, in India 6.4 (5.4) mln t, and in Australia 1.6 (1.1) mln t.
Worldwide use is expected to increase to 52.2 (50.5) mln t including a crush of 49.4 (48.0) mln t. This should lead to slightly higher ending stocks of 4.2 (4.0) mln t and to a stocks-to-use ratio of 8.0 (7.9)%.
Global rapeseed meal output is forecast to increase to 29.2 (28.3) mln t and exports to 3.7 (3.5) mln t. Rapeseed oil production may reach 19.8 (19.1) mln t, exports 2.3 (2.1) mln t and use 19.7 (19.1) mln t so that ending stocks are estimated at 1.2 (1.2) mln t and the stocks-to-use ratio at 6.3 (6.1)%.
