Futures in rapeseed, weighed by resilient hopes for the European Union crop, failed to join an oilseeds sector bounce from lows which have left palm oil futures on course for their worst month in 13 years.

Oilseed futures overall enjoyed a firm start to the week, in particular palm oil which for September delivery surged by 5.9% to 4,938 ringgit a tonne in Kuala Lumpur.

The gains were attributed largely to profit-taking on short positions after the lot slumped by 14.6% last week – a third successive weekly decline – fuelled by the lifting of Indonesia’s ban on exports of the vegetable oil.

Palm shipments from Malaysia, the second-ranked palm oil exporter, fell by 13.2% month on month in the first 25 days of June, ITS said on Saturday, with rival cargo surveyor AmSpec Agri putting the drop at 19.6%.

A seasonal rise in production has also been weighing on values, with the Malaysian Palm Oil Association on Thursday estimating production during June 1-20 up 15.9% month on month.

Even after Monday’s gains, palm oil is 22% down for June on a benchmark contract basis, on track for what would be its worse performance since October 2008.

Rapeseed underperformance

Monday’s oilseeds revival saw Winnipeg canola for November, the best-traded contract, rise by 1.4% in early trading to Can$882.00 a tonne, with Chicago soyoil for August up 1.3% at 67.83 cents a pound.

However, Paris rapeseed for August dipped by 1.7% to E684.50 a tonne, renewing a decline hastened by attempts by some governments in Europe, the top consuming region, to stem requirements for biodiesel, made from the oilseed.

Agritel noted that price pressure had come “particularly on rumours of lower biofuel mandates, mainly at the request of Germany and the United Kingdom.

“This is being discussed at the G7, which is currently taking place,” the analysis group said, although added that “there is strong opposition to these proposals, mainly from the US”.

Harvest upgrade

Rapeseed supply prospects also received support on Monday when Strategie Grains nudged higher by 133,000 tonnes to 18.33m tonnes its forecast for the European harvest of the oilseed this year, taking the estimate even further above the 16.98m tonnes achieved in 2021.

The upgrade reflected increased yield hopes for the Baltic states and the Czech Republic, and increased area figures for France and Sweden.

Strategie Grains forecast rapeseed prices in the key port of Hamburg averaging $665 a tonne in 2022-23, as starts next month, down by $160 a tonne year on year.

On the palm oil price outlook, producer Anglo-Eastern Plantations said on Monday that “we expect the ex-mill price in Indonesia to improve after the government issued guidelines and regulations on 14 June 2022 to accelerate the shipment of palm oil following the lifting of the export ban”.

However, the group added that “we expect a pullback in the CPO [crude palm oil] price as crop production improves further in the second half of the year”.