The December supply and demand report released by the US Department of Agriculture shows that the global oilseed production forecast for 2025/26 has been raised by 2.25 million tons compared to the previous month, reaching 69026 million tons, higher than 684.5 million tons in 2024/25 and 657.4 million tons in 2023/24. The main reason for the increase in oilseed production this month is the increase in rapeseed and peanut production, which exceeds the impact of the global decrease in sunflower seed production. Due to the reduction in processing and exports, the ending inventory was also increased by 1.34 million tons to 143.6 million tons.

The report from the US Department of Agriculture shows that global oilseed production will increase by 2.25 million tons in 2025/26, with a significant increase in rapeseed production leading to oversupply and a 1.34 million ton increase in ending inventory. This will directly increase the supply in the spot market and lower the price of rapeseed. Fundamental bearish factors dominate, and it is expected that spot prices will face downward pressure.

As the main raw material of rapeseed oil, increasing the yield of rapeseed will reduce production costs and increase the supply of rapeseed oil. The report shows an increase in global oilseed inventories, which is bearish for spot prices of rapeseed oil. Meanwhile, based on the data of rapeseed oil OI futures on Zhengzhou Commodity Exchange (such as the closing price of contract 2605 at 9,347 RMB/ton, up and down +89.00), although there are short-term fluctuations in the current market, the oversupply of fundamentals will drive down futures prices. It is recommended to pay attention to the performance of future contracts.

The increase in rapeseed production will enhance the supply of rapeseed meal raw materials, leading to oversupply in the rapeseed meal spot market. The report from the US Department of Agriculture emphasizes the increase in ending inventory, reflecting weak demand and bearish prices. Spot prices are expected to come under pressure due to cost reductions and increased supply, with fundamental factors pointing towards downside risks.

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