Small EU harvest drives rapeseed prices

In Germany, UFOP reports that whereas the small harvests in the EU and buoyant RME demand from the biodiesel industry sent rapeseed prices in Paris rising, US soybean prices were guided by mixed stimuli.

Paris rapeseed prices have been on a steady rise since the beginning of March 2019. Reaching EUR 351.50 per tonne – the lowest level since June 2018 – on 4 March 2019, they recently closed at EUR 383 per tonne. According to Agrarmarkt Informations-Gesellschaft mbH (AMI), prices were driven by the small EU rapeseed harvest. The trend was also supported by increasing prices for palm oil. Forward prices of rapeseed were also lifted by the sharp rise in demand for biodiesel. At the same time, along with UCOME, which is in demand at all times, rapeseed methyl ester (RME) has been ordered since mid August for incorporation in blends from October onwards to meet winter diesel requirements. Market participants said that, consequently, demand for RME had picked up earlier than usual.

On the other hand, Chicago soybean prices did not show a clear trend. Seldom ever have analysts’ and the USDA’s assessments of soybean plantings been so disparate. Due to massive delays in planting in the US, the volume of the US harvest was still uncertain. Depending on weather conditions and US crop development, prices will rise or decline. The intensifying trade war between the US and China weighs heavily on prices. China has collected an additional 5 per cent punitive tariff on soybean shipments from the US since 1 September 2019. However, the extra tariff is of a more symbolic nature. In fact, its purpose is rather to demonstrate that China has no intention to back down in the trade dispute with the US. This assumption is based on the fact that the Chinese government has already strictly prohibited domestic companies from purchasing US agricultural products, such as soybeans. This means that an agreement in the US-China trade dispute recedes further into the distance. Although soybean prices have declined EUR 18 per tonne since June 2019 to recently EUR 282 per tonne, they were still EUR 20 per tonne above the year-ago level.