The Commission now estimates production of common wheat, or soft wheat, this season at 114.6 million tonnes, down from 116.1 million predicted a month ago and nine per cent below last year’s crop.

It is also the lowest volume since 2012/13, bringing the Commission into line with other recent forecasts of the EU’s main cereal crop.

The EU harvest has been dented in particular by the smallest crop in France in 40 years, as well as a sharp fall in German production as the bloc’s two biggest wheat growers endured repeated heavy rain in the past year.

In monthly supply and demand data, the Commission increased its projection of EU soft wheat imports in 2024/25 by one million tonnes to seven million but left unchanged its soft wheat export forecast for this season at 26 million tonnes.

It lowered its forecast for 2024/25 usable production of maize in the EU to 60.1 million tonnes from 61.6 million in late August, now four per cent below last season’s level.

Maize crops, harvesting of which is under way, have been hurt by summer drought and heatwaves in the east of the bloc.

Estimated EU barley production in 2024/25 was also revised down, to 50.4 million tonnes from 51.3 million a month ago, though that was six per cent above last year’s drought-hit crop.

In oilseeds, the Commission lowered its estimate of the bloc’s rapeseed output this season to 17.2 million tonnes from 18.0 million, nearly 13 per cent below last year’s level.

For sunflower seed, which has also suffered from drought in eastern Europe, the Commission cut its production forecast to 9.5 million tonnes from 9.9 million, three per cent below the previous crop.

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Citing favourable price expectations for canola compared to wheat and barley, the USDA’s Australian attaché was forecasting an 8.5 per cent increase in seeded canola area in the country in 2024/25, with production up by 14 per cent at 6.5 million tonnes. If realized, that would be Australia’s third-largest canola crop on record. Canola exports from Australia are forecast at 5.1 million tonnes, which would be up by 16 per cent on the year.

Australian farmers are just starting to seed their next canola crop, with moisture conditions generally in better shape than they were a year ago.

Meanwhile, European farmers reduced rapeseed plantings in 2024/25 according to the Vienna-based attaché, with the EU ban on the use of neonicotinoids and declining availability of other plant protection products contributing to the smaller plantings. Profitability compared to other planting options in the EU was also said to be behind the 4.8 per cent reduction in area.

Rapeseed production in the EU is forecast to be down by 4.4 per cent in 2024/25, at 18.8 million tonnes. As a result, “the decline in production will need to be offset by imports, mainly from Ukraine and Australia, the EU’s traditional suppliers,” said the attaché. However, several member states have bans on imports of Ukrainian agricultural commodities in place, including rapeseed.

—Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg. 

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That’s slightly more than the 2022/23 crop, which the New Delhi desk placed at 11.83 million tonnes compared to the USDA’s official number of 11.30 million. The report noted favourable cold weather during the rabi crop season proved to be beneficial to the 2023/24 crop while harvested area and yields were relatively steady.

The New Delhi desk projected the 2023/24 crush at 10.40 million tonnes, while the USDA was 200,000 tonnes less. Total domestic consumption was pegged at 11.80 million tonnes by the attaché with the USDA lower at 11.55 million.

There was a wide disparity in 2023/24 ending stocks, with the attaché at 850,000 tonnes compared to the USDA’s 574,000.

The report noted India neither imports nor exports rapeseed-mustard seeds. Due to high volumes of domestic use, the country exports small amounts of oil and meal.

India’s rapeseed oil production for 2023/24 was estimated by the attaché at 3.95 million tonnes with the USDA at 4.29 million. Exports were placed at 15,000 tonnes by the attaché and 10,000 by the department, with domestic use taking up the rest.

The oil’s ending stocks for 2023/24 were projected by the New Delhi desk at 340,000 tonnes with the USDA higher at 397,000.

Rapeseed meal production for 2023/24 was set at 6.15 million tonnes by the attaché with the USDA at 6.07 million. Exports are much larger than oil, with the attaché at 1.90 million tonnes and the USDA at 1.10 million. The rest is for feed with the New Delhi desk at 4.30 million tonnes and the department at 4.75 million.

Ending vary widely, with the attaché at 134,000 tonnes compared to the department at 417,000.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

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“It’s hard to have a real solid opinion of whether we’ll go up or go down, because you could easily make a case either way,” said analyst Mike Jubinville, of MarketsFarm.

“Is there room to go (lower)? absolutely,” Jubinville said, adding “are we oversold and due for a bounce? Absolutely.”

Canola has lost about 45 per cent from its highs of the past year, with similar losses seen in Chicago soyoil, said Jubinville. However, he noted European rapeseed is down by 61 per cent from its own highs. While canola is usually the leader in the relationship with European rapeseed, the past six months has been the other way around and Jubinville thought the weakness in rapeseed could leave canola open to more downside as well.

Looking at the weekly chart, Jubinville expected the July canola contract that settled at $649.50 per tonne on Wednesday could easily drop into the $500 per tonne area. On the other side, a correction to the 20- or 50-day moving averages would see prices move back above $700 but would still leave the market in a long-term downtrend.

Crush margins are off their highs of the past year but remain attractive from the processor’s perspective, which should remain supportive, although Jubinville said there was increasing competition from other oilseeds in the export market.

With expectations for large crops already being priced into the markets, “if we fall short in any way, then we have room for a bounce,” said Jubinville.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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While the attaché pegged planted and harvest area for 2023-24 at 410,000 hectares — up from last year’s 364,000 — yields were forecast to drop from almost 3.74 tonnes per hectare to nearly 3.37.

Along with the projected output in rapeseed, the attaché estimated the U.K.’s imports of the oilseed at 750,000 tonnes. Altogether, the country’s total supply was projected to be short of 2.22 million tonnes, 1.6 per cent more than in 2022-23. Of that supply, the attaché placed the crush at two million tonnes, plus 80,000 in feed use. Ending stocks were projected to be 86,000 tonnes, the same amount coming into 2023-24.

The attaché estimate the U.K.’s rapeseed meal production at 1.14 million tonnes. Along with beginning stocks of 75,000 tonnes and imports of 200,000 tonnes, total supply of the meal was set at 1.42 million. Of that, 1.25 million tonnes is expected to be used domestically, which would be on par with the previous two marketing years. Meal ending stocks were set at 90,000 tonnes, 15,000 more than in 2022-23.

As for rapeseed oil, the attaché estimated the U.K. to produce 800,000 tonnes. With beginning stocks of 75,000 tonnes and imports of 90,000 tonnes, the total supply was forecast at 965,000. Of that, 780,000 tonnes is to be used domestically, with a carryover of 85,000, up 10,000 from 2022-23.

The attaché noted input costs in the U.K. increased due to Russia’s invasion of Ukraine, but fertilizer and fuel prices have come down during 2023. The London desk stressed any major developments in the war could result in changes in the attaché’s assumptions.

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In a Global Agricultural Information Network (GAIN) report released Wednesday, the EU’s 2023-24 rapeseed crop is expected to total 19.3 million tonnes, a 0.8 per cent decline from the previous year. Yields are expected to be lower in many countries, but especially in France which has been dealing with drought conditions. This year’s harvest will be adversely affected in case of either a cool spring or dry, hot conditions in Western Europe.

Despite lower production, the seeded area for rapeseed last fall increased by two per cent to 5.98 million hectares, largely due to additional acres in Romania, Germany and the Czech Republic. Higher prices made rapeseed a more attractive crop to grow, according to the report, but newly implemented bans on neonicotinoids in Hungary and Bulgaria caused rapeseed area to decrease.

The rapeseed crush for 2023-24 is estimated to be 23.5 million tonnes, 600,000 lower than the previous year due to competition from soybeans and sunflower seed. Exports will increase by 25,000 tonnes to 550,000 despite uncertainty over the availability of supplies from Ukraine. Ending stocks for 2023-24 are projected to be 1.308 million tonnes, 100,000 more than in 2022-23.

The report also showed EU soybean production to increase by 300,000 tonnes to 2.8 million, a record high, with harvested area up by 100,000 hectares to 1.2 million in 2023-24. The crush is set to expand by 400,000 tonnes to 15.5 million. Ending stocks will be 20,000 tonnes higher at 521,000. Soybean production in the EU has grown over the past few years due to higher market prices as well as higher prices and limited access to fertilizer.

Sunflower seed production in the EU will jump by 1.2 million tonnes to 10.5 million in 2023-24, despite only a 20,000 hectare increase in harvested area to 5.2 million. The crop is expected to recover from drought conditions last summer, while seeded area will increase due to high market prices, less need for fertilizer and high crush demand. The crush is expected to grow by 150,000 tonnes to 10 million, while exports increase by 100,000 to 600,000. Ending stocks will decline by 15,000 tonnes to 612,000.

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The attaché projected rapeseed production for 2023-24 to hold at 11.5 million tonnes, the same in 2022-23. USDA’s official numbers placed India as the world’s No. 4 producer of rapeseed, behind the European Union, Canada and China. The department is scheduled to release its projections for 2023-24 in its next supply and demand estimates on May 12.

The attaché’s report was predicated on favourable reservoir water storage levels, as well as good soil moisture and sufficient usage of fertilizers. However, the El Nino that’s to form later this year could reduce rainfall amounts during India’s monsoon season. The attaché also noted excessive precipitation from January to April of this year likely reduced quality levels for crop seeded during the winter.

The New Delhi desk forecast yields to slip slightly, from 1.278 tonnes per hectare in 2022-23 to 1.264 in 2023-24, with that leading to other small changes from year to year.

The attaché placed harvested hectares at 9.1 million in 2023-24, 100,000 more than in the previous year. The rapeseed crush is to nudge up to 10.2 million tonnes and total domestic consumption is to move from 11.42 million tonnes in 2022-23 to 11.58 million in 2023-24. Ending stocks are to dip by 80,000 tonnes at 519,000.

India’s rapeseed crush was forecast to be in a similar situation, with production to bump up to 6.1 million tonnes in 2023-24. However, exports are to slip from 1.6 million tonnes to 1.1 million, but domestic use is to hold at 4.7 million. Ending stocks are to triple to 450,000 tonnes.

The attaché estimated India’s total oilseed output is to stay at 42.5 million tonnes going into 23/24. Along with rapeseed, the country grows soybeans, peanuts, sunflowers, cottonseeds and copra (coconut).

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European maize (corn) crops endured severe drought and several heatwaves during the crucial summer growth period.

The Commission reduced its estimate of usable production of maize in the EU in 2022-23 to 53.3 million tonnes from 54.9 million a month ago, further confirming the crop will be the smallest since 2007.

In a presentation accompanying the Commission’s data, the EU executive branch said the latest production cut reflected downward revisions to area and/or yield in Romania and to a lesser extent in France.

The Commission increased its EU maize import forecast in the 2022-23 season to 23 million tonnes from the 22 million estimate a month earlier.

EU maize imports have been running at more than double last season’s pace, as buyers have taken advantage of a recovery in shipments from war-torn Ukraine to help cover the shortfall from the EU harvest.

For soft wheat, the EU’s most-produced cereal, the Commission reduced its outlook for exports in 2022-23 to 34 million tonnes against the 36 million forecast a month ago.

Some soft wheat demand was shifted toward livestock feed use, with a one million-tonne increase.

But the lower export forecast together with a one million-tonne upward revision to imports led the Commission to increase its forecast of soft wheat stocks by the end of 2022-23 to 15.5 million tonnes from 13.7 million in October.

In oilseeds, the Commission cut sharply its estimate of the bloc’s sunflower seed crop, which like maize was hurt by torrid summer weather, with production now pegged at 9.3 million tonnes against 10 million previously.

For rapeseed, estimated 2022-23 output was trimmed to 19.4 million tonnes from 19.6 million but remained well above last season’s 17.1 million tonnes.

— Gus Trompiz reports on commodities and agriculture for Reuters from Paris.

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The attaché lowered ending stocks for China’s new-crop soybeans and rapeseed, while it increased the carryover for new-crop corn and wheat, in reports released by USDA on Friday.

The attaché explained that soybean and rapeseed output in China is apparently set to increase in 2022-23 due to “high domestic prices and government policies incentivizing oilseed production.” Meanwhile, slowed economic growth because of repeated COVID-19 lockdowns and higher global commodity prices have put a dampener on projections.

For the current and forthcoming marketing years the attaché lowered its call on soybean ending stocks for China. For 2021-22, the carryover was estimated at more than 28.5 million tonnes, 7.3 per cent less than USDA’s official projection. When it came to the following year, the attaché placed the carryout at about 29.53 million tonnes, down 6.4 per cent from the department’s current call. That’s because the attaché forecast smaller beginning stocks, less production despite more acres being seeded, and a slightly lower total consumption.

The carryover for China’s rapeseed was projected by the attaché to increase by almost 17 per cent in 2021-22 at 1.23 million tonnes based on a greater-than-expected crush. For 2022-23, the attaché projected a reduced carryout of 1.05 million tonnes, predicated on increased domestic consumption.

When comes to corn, the attaché increased ending stocks for 2021-22 Chinese wheat by 3.3 per cent at 217.24 million tonnes, based largely upon bigger beginning stocks. The latter was increased 3.4 per cent at more than 212.7 million tonnes. Conversely, that altered the beginning stocks for 2022-23, bringing them to 217.24 million tonnes. That expanded the year’s ending stocks by about two per cent at 208.22 million tonnes.

As for wheat, the attaché trimmed a little off of 2021-22 ending stocks, forecasting them to be 141.72 million tonnes. That’s based on smaller beginning stocks and slightly reduced imports. However, the carryout for 2022-23 is three per cent more than what USDA has projected. The attaché placed them at 145.82 million tonnes, with smaller beginning stocks, less imports and reduced domestic consumption.

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The most-active November contract dipped below the $800 per tonne level on Tuesday and Wednesday — but ended above that psychological chart point both days to settle at $825.30.

The relative stability shown by the canola market in the face of heavier selling in Chicago soyoil was tied in part to gains in European rapeseed on Wednesday, according to Ken Ball of PI Financial.

While canola crush margins “have taken a beating,” he said, they were still solid overall, with recent weakness in the Canadian dollar another supportive influence.

Farmer selling has also backed away after the initial declines, but Ball expected it would pick back up again on any corrections back toward the $900 per tonne level.

“People are being forced to pay a lot closer attention than they were a month ago,” he said.

He expected canola may be able to stabilize around current levels if U.S. markets don’t deteriorate further themselves.

Weather conditions through the growing season will also be followed closely. While there are some problem areas across the Prairies, early expectations are for a considerable improvement in canola production after last year’s drought. Ball noted that Australia’s canola crop was also shaping up to be large.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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