June 23, 2010
China rapeseed output may be less than USDA estimation
Rapeseed output in China, the world's largest consumer, may be as much as 15% smaller than estimated, adding pressure on global stockpiles and helping support soyoil prices, the Linn Group said.
''China's crop is considered more at peril'' than other producers, said Jerrod Kitt, an analyst at the Chicago-based commodity researcher and brokerage. The country's output may be 1.5 million tonnes to 2 million tonnes smaller than the 13 million tonnes forecast by the USDA on June 10, Kitt said.
Reduced output in China may help push rapeseed stockpiles below the 2007-2008 level, as Canada, the largest exporter, was forecast to lose 2 million tonnes of production in the 2010-2011 season on persistent wet weather, Kitt said. Canada accounts for 60% of global shipments of rapeseed.
The USDA forecast on June 10 that rapeseed output in Canada would rise to 12 million tonnes in the year beginning August, from 11.825 million tonnes this year.
''The obvious beneficiary to a tight rapeseed situation is soyoil,'' Kitt said. ''As rapeseed goes into what appears to be a potential rationing situation, some of the more discretionary industrial consumption could be priced out of the market and move over to beanoil.''
Rapeseed futures have gained 16% this year on the New York Stock Exchange (NYSE) Liffe in Paris as demand from importers including China and Japan exceeds supply. Global imports may rise 4.7% to 10.9 million tonnes, while exports were estimated to drop 1.9% to 10.7 million tonnes, according to the USDA's forecast on June 10.
Soyoil traded in Chicago has gained 5.9% from June 10 through yesterday (June 21) as excessive rains delay fieldwork in Canada, narrowing the commodity's loss to 4.6% this year. Soyoil and soy futures have dropped this year as global supplies expanded.
