Nobody wants to take delivery of November rapeseed
Euronext's November contract has dropped 46.5 €/t under February, almost all of it in the front month, while canola and soybean curves held. French cash is following it down, into a crush running below its usual pace.
Euronext's November rapeseed contract has lost 31 €/t in two sessions while February barely moved, and November now trades 46.5 €/t under February. A week ago the gap was 17 €/t. A month ago the two contracts stood almost level.
Almost all of that widening is November. Since early September it has fallen 49 €/t, while February has given up less than 4. With the contract heading into its delivery month, the market is saying that nobody wants to own rapeseed for November delivery.
A European rapeseed problem, not an oilseed one
The rest of the oilseed complex has not followed. The canola curve on ICE and the soybean curve in Chicago have barely moved this week and still sit where they usually do in early October, with canola futures 1% lower over the two sessions and soybeans 1% higher.
French cash rapeseed, on the other hand, is going down with November. Rouen stood 25 €/t under February on Monday, against 9 a month ago, and that print came before the two-session drop.
Taking delivery in November means owning seed in a market that is not pulling it. European crushers processed 2.97 Mt of rapeseed over July and August, about 6% less than usual for those two months, and the seed they did not take is still looking for a home.
Past February, the curve is calm
Our reading is that the market treats the excess as a problem of the next few weeks rather than of the season. Beyond February the curve is flat: May trades only 2 €/t over February, against 46.5 between November and February. Buyers are betting that the crushers work through the seed by winter. That only holds if the crush picks up.
Three signals in our data will show whether it does:
- The EU crush for September. Past Septembers ran between 1.47 and 1.64 Mt. A print in that range supports the reading. Another month under the usual pace means the seed now pushing on November will still be there in February.
- The May to February spread. At 2 €/t it prices no glut for the winter. If it starts to widen, the discount is moving down the curve with the seed.
- Rouen cash once November expires. If cash moves back toward February when the contract is gone, the pressure came from the delivery month. If it stays deep under, the problem is the seed itself.
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