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The Trader's view 10-12-10

Date Added: 10/12/2010

Matif Oilseed Rape goes to contract highs

The graph shows February 11 Matif oilseed rape in Euros

This week has seen oilseed rape prices explode to the upside as soya prices have improved back towards $13 a bushel with weather concerns continuing in South America.  Wheat prices have also improved as wet weather in Australia is likely to downgrade wheat quality.  It is currently unknown what the impact of the rain on the Australian canola crop will be, but any reduction in yield will severely impact the potential of more exports to the EU.

Whilst oilseed rape higher prices are impacting on crush margins, the price for rapeoil is also increasing and looking to develop a significant premium over soya oil.  This should help maintain the higher prices now available for oilseed rape.

Looking forward to new crop it is interesting to note the significant discount of harvest to old crop prices.  There is currently at least £50 per tonne differntial in prices, representing about a 13% difference.  As harvest approaches we would expect this differential to narrow as demand for rapeoil should remain strong.

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