Volga Baikal AGRO News Update on Rapeseed and Soybeans Situation 2020/2021 !!!

Rapeseed and Soybeans 2020/2021: Leaders in terms of Margin?

Volga Baikal AGRO News Update on Rapeseed and Soybeans Situation 2020/2021 !!!

Rapeseed and Soybeans 2020/2021: leaders in terms of margin? A possible reduction in gross receipts and an interesting global environment promise high income for farmers.

The volume of soybean production this year may decline due to a decrease in acreage and the weather factor, which, with a steadily growing demand, has already led to an increase in its cost. The rapeseed crop is likely to increase, but the decline in global gross harvest will also support good prices. If the forecasts of experts come true, then these oilseeds will again confirm the title of one of the most profitable.

According to the analytical company ProZerno, The total rapeseed plantings in 2020 decreased to 1.49 million hectares (in 2019 – 1.54 million hectares). A strong decline was noted in the Urals and Siberia, which was previously the main producer of this agricultural crop. Senior Expert of the Institute for Agricultural Market Studies (IKAR) Vadim Semikin explains this dynamics by the unsuccessful results of 2019: due to the large spread of cabbage moth, many farms became disillusioned with rapeseed and reduced their area. “Despite the decrease in sowing, the gross yield of this crop may be higher than last year,” – said Vladimir Petrichenko, general director of ProZerna. “It will save that winter rapeseed in the south has not suffered as much as grain crops, and in the Kaliningrad region, which is a large producer, the harvesting results look very good.”

Rapeseed record: to be or not to be?

Depending on the terms of sowing in the areas of rapeseed for this year’s harvest, there was a multidirectional dynamics. According to IKAR, sowing of spring crops decreased to 1.19 million hectares from 1.37 million hectares in 2019, and winter crops increased to 300 thousand hectares from 190 thousand hectares, respectively. The main increase in winter rape was noted in the south, in the central zone and the North-West zone, Semikin specifies.

Winter rapeseeds are in great demand this season, adds Sergey Tuchin, Director General of the RASRAPS Association. The area of ​​its cultivation over the past few years has expanded significantly, and farmers have begun to receive fairly high yields. According to the expert, this was facilitated by mild winters and improved technologies. For example, in 2020, the Moscow region received a record yield in the country – up to 50 c / ha on intensive hybrids, a similar picture in the Tula region, he gives examples. “Harvesting winter rape starts earlier than spring rape, at least a month, and this is the first crop in the crop rotation, which is harvested,” Tuchin notes. “Earlier harvesting allows you to quickly get your first money, while rapeseed is one of the most profitable agricultural crops.” The main limiting factor for the expansion of crops of winter rapeseed, in his opinion, are severe agro-climatic conditions. “So, the Rostov region planned to sow 40-45 thousand hectares of winter rape this year, but so far the weather does not allow: it is too hot and dry, and the deadlines are running out,” the expert said in early September. Farms of the Krasnodar Territory faced the same problem.

The rapeseed yield in 2020 was unexpectedly high, Semikin notes. According to the Ministry of Agriculture, by mid-September, agriculture was threshed from 864.1 thousand hectares, or 57.9% of the sown area, 1.7 million tons were threshed with an average yield of 20.2 c / ha. The final gross harvest of rapeseed may reach 2.25 million tons (in 2019 – 2.06 million tons), the IKAR expert predicted in early September.

Prices are running in deficit

The start of the 2020/21 season was marked by the highest price increase for rapeseed compared to last year in comparison with other oilseeds. “The main player in the rapeseed market and its main consumer, the European Union is raising prices due to the projected decline in harvest, which is reflected in the Russian conjuncture,” comments Vladimir Petrichenko. Last year in Europe there was a strong reduction in rapeseed production due to bad weather, in 2020 the harvest may be even smaller, Semikin confirms. Due to a shortage of raw materials, world prices at the beginning of September were higher than last year by 10%, while domestic prices were 25% higher. Then the processors of the Central Federal District bought rapeseed at 32 thousand rubles / ton.

Soybean production will decline

Prospects for another oilseed crop, soybeans, are still somewhat worse than rapeseed. Its crops fell from 3.04 million hectares in 2019 to 2.87 million hectares this year. “To a lesser extent, areas have decreased in the Central Federal District, to a greater extent in the South and in Siberia,” Semikin says. “The farmers of the southern regions preferred winter rapeseed and sunflower, and in the Siberian Federal District last season was not very successful for soybeans – many processing plants did not work, so some farmers reduced its production”. A significant reduction in crops was also noted in the Far East. In 2019, due to heavy rainfall, farmers there lost up to 25% of their fields, and in 2020 they were already more careful. However, the weather this year in the Far Eastern Federal District is more favorable, and the soybean harvest in the district will grow. In the central part of Russia, the collection, on the contrary, will be lower than a year earlier. September forecast IKAR the total soybean production is 4.15 million tons (last year – 4.36 million tons), but at the beginning of the month, Semikin did not rule out that by the end of the month the estimate could be increased.

Vladimir Petrichenko then expected a harvest of soybeans at the level of 4.28 million tons. But in the near future he hoped to adjust the forecast downward due to bad weather conditions in southern Russia. “In general, a decline in production is expected for soybeans, but by how much it is difficult to say for sure,” the expert was cautious in September. “The current yield on farms is lower than last year’s, but this is temporary, the average harvest per hectare will increase as soon as the Chernozem region is involved in harvesting.”

The volume of exports of soybean oil in the current agricultural year can reach 680 thousand tons. According to Semikin, the September level of world prices for soybean oil was also high – + 10% to last year. The main indicator on the market is Argentinean oil, which has risen in price. “We do not see a price correction, since alternative markets – rapeseed, sunflower, palm oil – are also quoted high, in addition, in South America, the weather conditions are not the best (drought) and there is a shortage of soybeans on the domestic market. I think that in the context of one or two months there are no factors for lowering prices on the world market,” – the expert concludes.

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