Europe's crushers are leaning away from rapeseed while every price leans towards it

Europe's crushers stepped up in September, and none of the extra went to rapeseed. They put 3.11 Mt of rapeseed, sunflower and soybeans through their plants, 0.12 Mt more than a year earlier, and the gain came from sunflower, up 17% to 0.46 Mt, and soybeans, up 7% to 1.11 Mt. Rapeseed held at 1.54 Mt against 1.56, and its share of the crush slipped just under half, where it took 56% in September 2021.

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The rapeseed is there

This is not a shortage. French collectors held 2.28 Mt of rapeseed at the end of August against 2.00 a year earlier, and they were still adding to it over the month. Eurostat puts the EU crop at 19.4 Mt, below last year's 20.2 but well above the 16.8 of two seasons ago, and Europe has needed less seed from abroad, 1.09 Mt imported since mid-July against 1.21 at the same point last year. The extra sunflower comes on a crop Eurostat puts at 9.7 Mt, 1.2 Mt bigger than last year's.

Everything that prices rapeseed says crush it

The crushers' choice runs against every price signal around the seed:

• The plant margin. Crushing rapeseed in France paid 209 €/t on average in September, against 165 a year earlier, while sunflower paid 65 against 96.
• The winter blend. Rapeseed biodiesel holds up in the cold better than its rivals, and the market is paying for it early: RME traded 186 $/t over FAME 0 in ARA on 16 October, against 25 to 60 all through last winter.
• The oil. Rapeseed oil fell 4% in Rotterdam since early September, in line with palm and Chicago soybean oil, while soybean and sunflower oil there rose 5 to 6%. Rapeseed oil went from the dearest of the three in September to the cheapest, 46 $/t under soybean oil on 20 October.

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Our reading: winter is the test

Last winter the RME premium never widened. This year it has nearly doubled since September, while the oil that feeds it has turned cheap. Our reading is that crushers have every price reason to swing back to rapeseed this winter, so the coming months will show whether the shift away from it is a matter of price at all. Three signals in our data will tell:

• Fediol's October and November crush. Rapeseed regaining share as the winter blend pulls would mean the September mix was a passing one. A share still drifting lower against this premium would mean something other than price is steering the plants.
• The RME premium over FAME. A premium that holds through the winter keeps the pull on rapeseed oil in place. A retreat to last year's levels would take it away.
• Rapeseed oil against soybean and sunflower oil in Rotterdam. A discount that persists while the winter premium holds would say Europe has more rapeseed oil than its biodiesel plants are asking for.