Market Remains Stable for Rapeseed (Canola) Oil in North America

USA: As supplies in the pipeline looked to be sufficient for that time, Rapeseed (Canola) Oil prices were still under pressure in February 2023. Since North American crushers were operating at close to full capacity, crush margins remained very lucrative. Rapeseed (Canola) Oil exports are currently experiencing tougher competition from increased Australian supplies, despite trending at a pace that should comfortably meet analyst estimates for the crop this year. These supplies have been meeting the requirements of less margin but still significant markets for Rapeseed (Canola) Oil grown in North America. It is observed that when the ICE Rapeseed (Canola) Oil contract hits the roughly $799 per Metric Tonne (MT) level, China appears to be an active buyer.

A recent stock count for the Rapeseed (Canola) Oil crop hinted that the crop in North America in 2022 might have been larger than official government records suggest. Meanwhile, the vegetable oil markets are still being impacted by South American crop circumstances. Estimates of soybean production in Argentina are getting lower and lower, while predictions of production in Brazil are getting higher. Brazil's soybean crop is still behind what it was the previous year. While European rapeseed levels have declined, Malaysian palm oil has remained stable. North American Rapeseed (Canola) Oil is priced somewhat out of the market due to the weaker European prices and deliveries of Australian oil in the global market.

According to the February USDA Oil Crops Forecast, domestic demand for Rapeseed (Canola) Oil is growing as the US imported more oil seeds in December than it did in the preceding four months combined. This happened at the same time as the Rapeseed (Canola) Oil pathway for renewable fuel manufacturing was approved. A record-breaking 6.77 billion pounds of Rapeseed (Canola) Oil are anticipated to be produced, an increase of about 183 million pounds over the previous month. Rapeseed (Canola) Oil usage for biofuels was predicted to increase once more, from 1.5 billion to 1.6 billion pounds. Rapeseed (Canola) Oil supply is expected to grow even if demand is at record highs, which will decrease prices from $0.69 per pound to $0.73 per pound.

As per the ChemAnalyst database, due to favorable production conditions in the US domestic market, the price of Rapeseed (Canola) Oil is projected to increase trend. Also, traders have a lot of stock in hand to meet consumer demand.