Extremes in spring and summer weather across the Northern Hemisphere have tightened forecasts for the 2010-11 world supply of rapeseed, including canola, and by extension the world supply of oilseeds, providing underlying support to vegetable oil prices.

The U.S. Department of Agriculture on July 9 forecast world rapeseed production in 2010-11 at 57.83 million tonnes, down 2.07 million tonnes from the June forecast and down 2.1 million tonnes, or 4%, from 59.93 million tonnes in 2009-10. Production prospects were trimmed for Canada, the European Union and China.

Canada is the world’s second-largest producer of rapeseed with China holding the number one ranking. The U.S.D.A. forecast Canadian canola (the variety of rapeseed produced in Canada and the United States) production this year at 10.20 million tonnes, down 1.8 million tonnes, or 15%, from the June forecast of 12 million tonnes, and down 1.63 million tonnes, or 14%, from 11.83 million tonnes as the 2009 outturn. The reduction was attributed to a lowering in the forecast for harvested area of canola this season to 5.75 million hectares from the 6.8 million hectares projected in June.

In its most recent Oil Crops Outlook, the U.S.D.A. commented, “The planting window in Canada has always been narrow. So when soaking rains in late May extended through June, fields flooded, newly planted seed drowned, and it became impossible for farmers to finish planting.”

Also a factor in the drop in Canadian canola production this year compared with 2009 was a lowering in the forecast average yield to 1.77 tonnes per hectare from an average yield of 1.94 tonnes per hectare in 2009.

The U.S.D.A. projected E.U. production of rapeseed at 20.6 million tonnes, down 0.4 million tonnes, or 2%, from the June forecast and down 0.85 million tonnes, or 4%, from 21.45 million tonnes in 2009. The U.S.D.A. commented, “In France, a dry spring is expected to sharply curtail rapeseed yields from a year ago. The crop reduction could moderate the rise in rapeseed crushing and shrink E.U. ending stocks to a three-year low.”

The U.S.D.A. forecast China’s rapeseed production at 12.8 million tonnes, down 0.2 million tonnes, or 2%, from the June forecast of 13 million tonnes and down 0.9 million tonnes, or 7%, from the 2009 outturn of 13.7 million tonnes.

The Ukraine also is a significant producer of rapeseed, and that nation was in the grip of a drought said to be the worst since the 1970s. Yet, the U.S.D.A. projected Ukrainian rapeseed production this year at 2 million tonnes, unchanged from the June forecast and up 5% from 1.9 million tonnes in 2009. A U.S.D.A. analyst observed rapeseed in Ukraine is an autumn-sown crop “so it may have matured before the worst of the dryness. A majority of Ukraine’s crop has already been harvested, which will help provide data for updated production estimates.”