German planting likely to push EU rapeseed harvest to four-year high

Rapeseed output in the EU, the world’s largest producer of the oilseed used in cooking and biofuels, may increase to a four-year high after German farmers planted more crops.

Total European production may rise to 20.96m metric tons in 2013-14, up 8.8% from a year earlier, according estimates from the Brussels-based farm lobby Copa-Cogeca.

That would be the largest crop since the 2009-10 season, EU data shows. The rapeseed harvest in Germany, the second- biggest grower in the 27-nation bloc, may climb 15% to 5.54m tons, the country’s oilseed-industry association said.

Rapeseed futures on NYSE Liffe in Paris advanced 6.3% this year, rising to a record in July, as drought in the US crimped supplies of soybeans, an alternative oilseed. This season, the EU’s rapeseed harvest was little changed at 19.2m tons, according to the European Commission, the bloc’s administrative arm. EU farmers begin sowing rapeseed in August, and plants go dormant over winter before harvest starts in June.

“The price was very attractive at the sowing time,” said Dieter Bockey, head of biofuels and renewable resources at Berlin-based industry group UFOP. Germany had “the best sowing conditions in years”.

Rapeseed trailed soybean’s 23% gain this year on the Chicago Board of Trade and a 12% rise in ICE Futures Winnipeg’s contract for canola, a variety of rapeseed. Soybeans climbed to a record $17.89 a bushel in September and corn climbed to an all-time high of $8.49 a bushel in August.

The Standard & Poor GSCI Agriculture gauge of eight commodities advanced 7.4% this year.

The EU is the world’s largest producer, consumer, and importer of rapeseed, according to the US agriculture department.

The oilseed is the bloc’s fourth-largest arable crop, after wheat, barley, and corn. In the 2013-14 season, rapeseed may be grown on 6.81m hectares (16.8m acres) in the EU, up from 6.48m hectares in the previous season, according to Copa-Cogeca.

The area devoted to rapeseed in the EU may climb by as much as 500,000 hectares as Germany had its first planting season in three years without excess rain, and farms in Poland seeded more of the crop, said Oliver Balkhausen, deputy head of economics at trader Alfred C Toepfer International GmbH, on the sidelines of an oilseed meeting last month.

Hamburg-based researcher Oil World said last month that it expects Germany’s crop area to jump 12% to 1.45m hectares as French planting declines 3.4% to 1.55m hectares. Poland may boost seeding by 18% to 800,000 hectares, supplanting the UK with the EU’s third-largest rapeseed area, Oil World said. The researcher will release its next weekly supply and demand report.

In Germany, crop conditions are currently “very good”, said Mr Bockey. The group’s production forecast is contingent on the expectation that winter temperatures will not drop low enough to damage crops. Germany’s rapeseed production in the previous season was 4.82m tons, according to the Federal Statistics Office.

The winter-crop area in France, the EU’s largest rapeseed producer, may drop 9.4% to 1.45m hectares, because drought in August and September discouraged farmers from planting, said Paris-based researcher Cetiom.