In 2017/18, EU rapeseed production is forecast to recover to 22.0 million tons. This is expected to diminish the need for extensive imports in the coming year while allowing processors to maintain crush at high levels – similar to 2016/17. Stock levels are expected to remain tight given the low carryin.
The developing tight global supply situation could limit imports, stock building, and higher crush. With the EU having limited growth forecast for rapeseed meal production in 2017/18 and a slight decline in domestic sunflowerseed production, soybean and soybean meal imports are projected to recover.
As the new rapeseed season develops, any further production shortfalls in the major producing and exporting countries would further tighten the global canola market, ensuring price premiums for rapeseed over other oilseeds.
The European Union experienced a short rapeseed crop in 2016/17. However, due to Australia’s record production and large exports, European oilseeds processors managed to import at record levels and to expand crush volume to meet the growing demand for vegetable oils.
Consequently, rising rapeseed meal production, along with large supplies of sunflowerseed meal available from imports and domestic crush, negatively impacted soybean meal demand. This resulted in declines for both soybean and soybean meal imports and contributed to declines in U.S. exports to the region.
With 2017/18 world soybean supplies at record, prices should remain competitive, furthering opportunities for U.S. growers and exporters to gain back some of the volumes lost.