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Traders View 07.01.2011

Date Added: 07/01/2011

TRADERS VIEW-  07/01/2011

 Vegetable Oil Demand Holding

 The graph shown is for soybean oil on the CME Chicago exchange from October 2010 to January 2011.

 As can be seen soybean oil prices have increased steadily as stocks of vegetable oils have become depleted. The movement in rapeseed oil has been even more pronounced as demand for biodiesel remains high. This is continued to be supported by the ongoing requirements of sustainable oilseed rape.

 Oilseed rape prices have risen significantly in the old crop positions but are now showing signs of loosing their bullish momentum. The February Matif oilseed rape position is currently 507.00 euros but this position has become technical and a 15 euro premium over the May position. Once the February position stops trading on the 31st January it will be interesting to see whether the physical market falls to meet the May futures or vice versa.

 New crop oilseed rape prices are also strong but represent a £50-£60 discount to the old crop. There has been some concern regarding frost damage in the UK, however the extent of this is unlikely to become apparent until crops start growing again in February. At present we are not unduly worried that this will be significant.






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