Rapeseed Seen by Oil World Leading Rebound in Oilseed

Global oilseed production will rise to a record in 2013-14, propelled by higher-than-predicted rapeseed and sunflower seed crops that will alleviate two years of tight supplies, according to Oil World.

World production of seven oilseeds is forecast to gain 4.8 percent from a year earlier to 478.4 million metric tons, the Hamburg-based research company said today in a report. Sunflower seed output may be a record 40.2 million tons, 1.5 million tons more than previously estimated. Oil World also raised its forecast for rapeseed production to an all-time high 64.8 million tons, 1.3 million tons more than projected earlier.

“World supplies will become more ample, ending two consecutive seasons of tightness,” Oil World said. “This has already been reflected in the price trend during the past couple of months.”

Rapeseed futures on NYSE Liffe in Paris have declined 15 percent this year, trading at 353 euros ($471) a ton on July 31, the lowest for a most-active contract since August 2010. The European Union is the world’s biggest grower of rapeseed, used to make biofuel and cooking oil. Canada, which produces the canola variety of rapeseed, ranks second.

Production of rapeseed, the world’s second-largest oilseed crop after soybeans, was estimated at 20.8 million tons in the European Union, up 6.8 percent from a year earlier. Canada’s crop will be 6.5 percent bigger at 14.8 million tons while the harvest in a bloc of former Soviet Union countries will be 41 percent higher at 4.5 million tons, Oil World said.

In the EU, better-than-expected rapeseed harvests in Poland, the Czech Republic and Romania will boost the crop. The bloc’s rapeseed crushings will fall 1.3 percent as “large and attractively priced supplies of sunflower seed and sunflower oil” place pressure on European rapeseed oil prices and damp demand. “Sluggish” demand from the biodiesel industry will further reduced rapeseed consumption, Oil World said.

World soybean production may be 282.5 million tons, Oil World said. The forecast was 1.7 million tons lower than the previously forecast because of declining outlook in the U.S. and Canada, it said.

Before it's here, it's on the Bloomberg Terminal.