More bad weather for the world’s oilseed growers is pushing rapeseed and canola prices to fresh records and adding to food inflation worries.
Futures have been on a tear for a while, after last year’s harvests in Canada and Europe were plagued by scorching drought and planting cutbacks, cutting global rapeseed stockpiles to a four-year low.
Worries are mounting about supplies of rival vegetable oils, with hot and dry weather hurting South American soybean prospects and flooding hitting palm oil farms in Malaysia.
Photo: Reuters
As a recent crude oil rally also aids demand for the crops to make biodiesel, Paris rapeseed futures and North American canola notched new all-time highs on Friday. Their oils are also used for everything from frying French fries to mixing salad dressings. Rapeseed prices have nearly doubled in the past year.
“The situation is really tight, and the buyers are still there,” said Arthur Portier, an analyst at Paris-based farm adviser Agritel.
Paris rapeseed futures surged as much as 5.9 percent on Friday, the biggest intraday gain since 2009, and North American canola gained as much as 1.5 percent.
The gains come as palm oil — used in about half of all supermarket goods — has rallied and near-record food prices squeeze household budgets.
A UN index of food prices averaged 28 percent higher last year than the prior year, led by a surge in vegetable oils.
Europe has become increasingly reliant on oilseed imports in the past few years, after phasing out crop chemicals that rapeseed growers used to deter pests.
That is exacerbating local prices, as supplies shrink across key exporters, said Michael Magdovitz, senior analyst at Rabobank NV in London.
The situation could improve later this year. France and Germany have increased plantings, government data show.
Canadian farmers are also likely to plant more canola as wheat prices retreat, said Charlie Sernatinger, global head of grain futures at ED&F Man Capital Markets Inc in Chicago.
The world’s largest soybean producer and exporter is expected to fail to deliver a record crop this year.
Crop forecasters have slashed their estimates for Brazil’s soy output as persistent drought and heat caused losses in the nation’s south. Production is seen below last year’s level, when the South American nation reaped 137.3 million tons (139.5 million metric tonnes). The harvest could have reached as much as 145 million tons this season, according to initial forecasts.
Concerns over the South America crop have caused a rally in Chicago, with soybean futures rising 13 percent since the beginning of last month.
Brazil’s lower production is also likely to curb its shipments and might increase the competitiveness of US exports.
Heat and dry conditions were intense last month in Brazil’s south, a region accounting for about one-third of the nation’s crop. That led brokerage StoneX to cut its production estimate by 7.7 percent to 134 million tons earlier this week.
On Thursday, the local consultancy AgRural said output might be even lower at 133.4 million tons.
Argentina, also a major supplier of the oilseed, faces a similar weather pattern, with moisture deficits reaching at least 75 percent of the nation’s soy next week, the Commodity Weather Group said.
The reviews made this week on Brazil’s crop estimates might signal official cuts next week, when the US Department of Agriculture and Brazil’s Conab are scheduled to release forecasts for the nation’s crop.
Other commodities:
‧Gold for February delivery on Friday rose US$8.20 to US$1,797.40 an ounce, down 1.7 percent for the week.
‧Silver for March delivery rose US$0.22 cents to US$22.41 an ounce, down 4 percent weekly, and Marchcopperrose US$0.06 to US$4.41 a pound, down 1 percent for the week.
Additional reporting by AP
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS