Ukraine farmers are switching oilseeds, and making up for an ill-fated rapeseed crop by ramping up soybean sowings by 40%.

Analysts at UkrAgroConsult further cut their forecasts for the rapeseed crop by a further 4.5% to 1.61m tonnes, saying that "the majority of underdeveloped winter rape crops were lost during the winter".

"According to regional sources, this crop was considered lost on a total area of 535,000 hectares, 37.7%, as of late May," the Kiev based group said.

Ukraine's cold winter left many crops trapped in ice crusts for more than a month, and prompted a return to historic levels of winterkill in cereals too after two mild winters.

Feed needs

However, UkrAgroConsult lifted its forecast for soybean sowings by 5% to 910,000 hectares, saying the oilseed has become a popular choice for reseeding fields written off to cold damage.

"Its areas may expand not only in the traditional Steppe and Forest-Steppe zones, but also in the Forest zone, where early-ripening varieties ensure good yields."

Besides relatively high international prices, compared with grains, soybeans have strong domestic prospects thanks to growth in Ukraine's hog and poultry sectors, UkrAgroConsult said.

There is also "an important role of this pulse crop in crop rotations, where it improves soil fertility".

Ukraine's soybean production will jump by 38% to 1.4m tonnes this year, taking it far ahead of that in the European Union, a big export market for the country, which will produce 1.0m tonnes of the oilseed this year, according to the US Department of Agriculture.

Price rises

Indeed, Ukraine's poor rapeseed crop has added to the supply fears which have supported Paris prices of the oilseed above E300 a tonne, even as the market has retreated.

Paris rapeseed for August delivery closed E3.75 higher at E313.25 a tonne in morning trade, with the November lot up E3.50 at E318.25 a tonne.

Prices of Canadian canola have gained 2.4% over the last two days, their strongest two-day run of the year, as wet weather delays its sowings the rapeseed variant.

"Analysts estimate canola acreage could drop between 500,000-1m acres, causing the rally which has also been fuelled by fund buying and short covering," Kevin Kjorsvik at US broker Benson Quinn Commodities said.