Rapeseed oil likely to stay firm until spot supply tightness eases

After the rally, bulls took profits and exited, and rapeseed oil futures retraced continuously from the high, probing a stage low of Yuan 10,197/tonne on October 21. Subsequently, underpinned by rapeseed cost support at the bottom, the futures stabilized and moved in a range-bound recovery.

Rapeseed oil prices are currently in the middle of the trading range. The support stemming from firm cost and domestic tight supply remains in place, but cost alone is not enough to drive a sustained one-way rally, and the tug-of-war between bulls and bears has intensified.

In terms of the calendar spread, the rapeseed oil inter-month spread has continued to widen. On October 26, the ZCE OI2701-2709 spread stood at Yuan 412/tonne, up Yuan 62/tonne from the start of the month and down Yuan 27/tonne from last year. The old-crop/new-crop spread has continued to deepen, reflecting the market trading expectations of tight old-crop rapeseed supply.

The spread between ZCE OI2701-2705 contracts has maintained a positive structure, standing at Yuan 344/tonne yesterday, up Yuan 62/tonne from Yuan 282/tonne yuan at the start of the month and down Yuan 39/tonne from last year, reflecting the carry premium for storage from January to May, with the forward premium weaker than the same period last year. Overall, the spread has continued to widen, with near and far months maintaining a positive premium within the year. The spread structure shows that the core driver of the current trend is supply risk on the rapeseed side, while the boost from near-month inventory destocking is limited.

On the supply side, Mysteel's data show that national commercial rapeseed oil inventories are oscillating at a high level in the 511,500–545,000 tonne range. After inventories touched a stage high of 545,000 tonnes on September 18, they declined, briefly falling to 511,500 tonnes on October 16.

Although rapeseed oil inventories rebounded to 540,000 tonnes on week as of October 23, current national rapeseed oil inventories are overall significantly below the same period in the previous two years. I n 2025, domestic rapeseed oil inventories exceeded one million tonnes in the same period, and in 2024 the inventory midpoint was also around 600,000 tonnes, while in 2026 the inventory fluctuation range has basically remained at 420,000–540,000 tonnes.

Within the year, domestic rapeseed oil inventories were low at the start of the year; as rapeseed arrivals concentrated and crushing climbed up, rapeseed oil inventories rose to a stage high in the second quarter of 2026 and then fluctuated; recently inventories have rebounded to around 540,000 tonnes, a slight build, but the absolute inventory level remains low.

Low inventories provide bottom support for rapeseed oil prices, but end-user demand has not shown obvious expansion, and continued inventory building would cap upside gains. Coupled with rapeseed arrivals will likely edge lower from November, subsequent crush increments will shrink, and inventory upside will be limited. The inventory-side support logic remains in place, and downstream restocking follow-through needs continued attention.

In addition, for domestic rapeseed, mainstream transaction prices in Jingzhou, Chengdu and other places gave remained at Yuan 6,000–6,100/tonne. The peak listing period for domestic rapeseed has passed, and high-oil-content, golden-yellow rapeseed is selling quickly, providing some support from the supply side.

Currently, the Canadian new-crop rapeseed harvest is entering its final stage. ICE rapeseed had been weakening continuously, with the core reason being harvest pressure from new-crop supply materializing.

Recently, Canadian rapeseed quotes have pulled back and import margins have improved. Market sources say China has concentrated purchases of Canadian and Australian rapeseed for 2026 December–2027 April shipment, mainly Australian rapeseed, with an expected 1.5 million tonnes of new purchases in the near term. With rapeseed gradually arriving, domestic rapeseed oil is expected to begin inventory building in December, and the tight rapeseed oil supply will gradually turn loose, forming a persistent cap on rapeseed oil futures.

In the near term, the core trading theme for rapeseed oil remains centered on the pace of overseas rapeseed arrivals and domestic inventory expectations. Rapeseed oil has no independent policy bullish support and moves with the broader oils complex, but with the tight rapeseed oil supply not yet materially improved, its price is more resilient than soybean oil and palm oil. According to Mysteel survey, rapeseed arrivals are expected at about 585,000 tonnes, 445,000 tonnes, and 520,000 tonnes respectively in Q4.

Going forward, key items to track are rapeseed arrival progress, changes in oil mill crushing and startup rates, Canadian rapeseed export quotes, and overall sentiment in the oils complex. In the short term, rapeseed oil is likely to maintain a high-level rangebound pattern.