Drought in Russia: Grain region particularly affected
In Russia, the main region for grain cultivation has been experiencing dry conditions for weeks. This is likely to result in lower yields and poorer quality than previously expected.
On April 15, canola futures at the ICE exchange recorded another upward trend. The market was primarily supported by rising soybean oil prices at the CBOT and firmer rapeseed quotations at Euronext.
The July canola contract increased by $7.80, closing at $676.50 per tonne. In contrast, the November contract rose slightly by only 30 cents, reaching $649 per tonne. Consequently, the price difference between the old and new crop remains significant.
Currently, the July contract is moving near the upper end of a price range where several price corrections have been observed since spring 2024. Despite the potential for short-term profit-taking, the market continues to receive support from tight inventories and positive momentum from related segments within the oilseed market.
Soybean oil futures in Chicago increased by 3.28% on the same day, fully offsetting the previous day's losses. Traders attribute this development to new expectations regarding potentially higher biodiesel blending requirements in the U.S.
Rapeseed futures at Euronext also rose significantly, registering a price increase of 2.16%, further supporting the firm trend in canola prices.
In contrast, palm oil futures in Malaysia declined by 1.49%. Prices were pressured by weaker demand in Asian markets, negative signals from trading in Chicago, and expectations of rising production volumes.