Global rapeseed production cuts basically confirmed, rapeseed meal prices should not be overly bearish
Although autumn has arrived and the aquaculture industry is entering its final stage, which will weaken rapeseed meal consumption, the crushing operations of oil mills are on the verge of loss, the number of rapeseed arrivals at ports has decreased somewhat, and with the National Day holiday approaching, domestic oil mills are not highly motivated to produce, so domestic rapeseed meal supply is relatively tight. In addition, domestic rapeseed stocks are already low, and factories in Anhui, Hubei and other places have stopped purchasing. With low inventories coexisting with the off-season for consumption, domestic rapeseed meal is unlikely to see a one-sided trend, and rapeseed meal prices should not be overly bearish.
Global rapeseed production cuts basically confirmed
According to German media data, global rapeseed production for the 2015/2016 marketing year is estimated at 62.5 million tons, down 5.4 million tons from the previous year, the lowest in the last 4 years. Among this, EU rapeseed production is estimated at 21.5 million tons, below the previous year's 24.3 million tons; Canada at 14.1 million tons, below the previous year's 16 million tons; China at 10 million tons, below the previous year's 11 million tons; India at 6.5 million tons, above the previous year's 5.1 million tons; and Australia at 3.25 million tons, below the previous year's 3.46 million tons.
Commerzbank also expects dry weather to cause rapeseed production cuts in the EU and Canada, and the global rapeseed stock-to-use ratio may fall to 6%, the lowest level in 12 years. Due to tight global supply, rapeseed prices can offset part of the pressure brought by declining international soybean prices, which is relatively favorable for the rapeseed meal market.
Rapeseed purchases decline, oil mill operating rates low
As the end date of the price-support purchase approaches, manufacturers' willingness to purchase rapeseed has decreased. Domestic oil mill processing is unprofitable, and factory operating rates are at a low 26%-29%. According to statistics, as of September 20, various grain enterprises in 9 main producing areas including Sichuan and Hubei had purchased 1.52 million tons of newly produced rapeseed, down 1.95 million tons from the same period last year. The low operating rate also keeps rapeseed meal supply persistently low for a long period, which provides certain support for rapeseed meal.
⟦NL> As the holiday approaches, rapeseed meal purchases and sales will both be sluggish
As autumn arrives, temperatures gradually drop, aquaculture gradually enters its final stage, and rapeseed meal consumption will also be affected. But it is worth noting that some oil mills in Fujian, Guangxi and other places have already suspended production, and with the holiday approaching, most enterprises such as Donghai Grain and Oil plan to shut down for more than 10 days, so rapeseed meal supply is relatively small, which will provide certain support for the rapeseed meal market.
Overall, due to ample supply of soybeans and other oilseeds and weakening rapeseed meal demand, rapeseed meal prices are under short-term pressure, but under the broader environment of international rapeseed production cuts, rapeseed meal has also gained support from the relatively strong fundamentals of low inventories and low operating rates. Therefore, rapeseed meal prices should not be overly bearish.