Rapeseed sowings in the European Union, the top grower of the oilseed, are “unlikely” for the 2016 harvest to beat year-ago levels, the International Grains Council said, as it warned that dryness could prevent one-third of Ukraine’s sowings.
The financial incentive to sow rapeseed has reduced with as prices have “fallen markedly” from July highs, the IGC said, in its forecast comments on EU rapeseed prospects for 2016-17.
Best-traded Paris rapeseed futures for November 2015 touched E339.25 a tonne last month, down 17% from a July peak, undermined by less gloomy prospects for the Canadian canola crop, besides by broader weakness in the oilseeds sector.
And while the contract has recovered much lost ground since – as wet weather has slowed the Canadian harvest, and values of palm oil revived to a hit a three-month high on Friday – for many northern hemisphere growers, sowings decisions have already been made, and the planting window closed for autumn-seeded crop.
Rapeseed vs wheat
Futures for November 2016, relevant to producers looking ahead to their next harvest, have followed a similar trajectory.
Indeed, the IGC noted that the “price relationships with competing crops – notably wheat – are broadly in line with last year”, and below the average, curtailing the financial incentive for farmers to lift rapeseed sowings.
Furthermore, the council said that while most areas of the bloc had seen sowings progress “normally”, with soil moisture levels generally “adequate”, some eastern countries had seen dryness earlier.
These include Poland, the EU’s third-ranked rapeseed producer, where the IGC “tentatively” forecast plantings at 825,000 hectares, “down by 7% from last season and the five-year average”.
EU rapeseed sowings have already fallen four times in the past five seasons, shrinking area by a total of 500,000 hectares from the 2010-11 high of 7.0m hectares.
And the IGC comments come amid deepening gloom for rapeseed prospects in Ukraine, when plantings have been undermined by the same dryness prospects as for wheat – although, with the oilseed having an earlier planting window, the moisture deficit has represented a bigger setback.
“Crop prospects have deteriorated on prolonged dryness during planting, with this season’s rainfall estimated at just 40% of normal levels by mid- September,” the council said.
With the pace of planting the slowest since 2007, “up to one-third of the intended area of 823,000 hectares could remain unsown”.
That would represent a sharp drop on the 890,000 hectares seeded for this year’s harvest, and on the five-year average of 1.0m hectares.
(Source – http://www.agrimoney.com/news/eus-2016-rapeseed-area-unlikely-to-rise.-ukraines-faces-big-drop–8811.html)