France’s farm ministry slashed its rapeseed acreage expectations by 105,000 acres to 3.70 million. Despite the cut, its expected output will be a boost to the nation’s supply.
That’s because this year’s rapeseed plantings are set to rise by 6.7%. That figure is a solid bounceback from last year’s output. Overall, French rapeseed plantings will be 1.3% higher than the five-year average.
The news comes not long after rapeseed prices fell to 17-month lows in Paris. The recent uptick in prices has been tied directly to weather problems in Argentina, which have pressed soybean prices well above $10.00 in Chicago.
Canola prices bottomed out similarly in January. But the run-up hasn’t been as significant as the uptick in soybean prices. In one month, March contracts have added 2.19%. But we’re still off more than 2% from the 52-week high.
For French rapeseed prices to really drive canola higher, we’d need to see more prolonged weather issues and acreage cuts in the country.
Right now, there isn’t any indication that such events will transpire in the months ahead. This is why we continue look at this factor – European production – as bearish for the canola market.
France cuts estimates for winter wheat, rapeseed seedings
France ditched ideas of above-average winter grain sowings this year, trimming expectations for plantings of both wheat and rapeseed area while making a small upgrade to the barley seeding estimate.
The farm ministry in France, the European Union’s top grain producer, downgraded by 68,000 hectares to a four-year low of 7.08m hectares its estimate for sowings of the main winter cereals plus rapeseed for the 2018 harvest.
The revision, which took the figure below the average of 7.13m hectares, reflected in the main a cut of 70,000 hectares to 4.96m hectares the estimate for plantings of winter wheat.
Seedings at that level would represent a recovery of only 4,000 hectares from 2017 area, which was downgraded to a five-year low.
The ministry flagged that area had fallen by 12.6% in Lorraine, in northeast France, where yields last year did not match the recovery seen in other regions.
‘Sustained global demand’
For rapeseed, the ministry cut its estimate for sowings by 42,000 hectares to 1.50m hectares – although this still represents a rebound of 94,000 hectares from the previous seeding season, when plantings were hampered by poor weather.
“The rise in rapeseed prices driven by sustained global demand could explain this increase in area,” the ministry said.
For rapeseed, Paris futures prices were higher than a year before for much of the sowing window, which is earlier than for wheat, although values have fallen since, hitting a 17-month low of E340.25 a tonne in January, before recovering this month as Argentine weather worries boosted oilseed prices.
French rapeseed sowings were seen as particularly strong in Lorraine, soaring 71%, as growers switched winter crops.
By contrast, the ministry nudged higher its estimate for winter barley sowings by 12,000 hectares to 1.37m hectares, taking to 37,000 hectares the rise expected in plantings year on year.
Again area benefited by a switch by Lorraine farmers away from wheat, with the area’s winter barley seedings seen up 6.6% year on year.