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Traders view from Santiago 8th April 2011

Date Added: 08/04/2011

Markets holding steady

 

 

Oilseed rape prices are holding steady although old crop has again dipped below £400.00 ex farm whilst new crop is holding on to most its of recent gains.

 

The continuing strength of crude oil will no doubt encourage both bioethanol and biodiesel production. This will be important for corn prices aswell as oilseed prices as continuing demand will keep stocks tight. As the value of corn continues to rise this should support the soya price since at present values, soya acres are likely to be lost corn.

 

We are of the opinion though that it is difficult to discourage selling at the current levels as they represent a good return over the cost of production. Also a certain amount of the price of both crude oil and farm commodities must contain some risk premium which could disappear in the next few months. A relaxing of the tension in the Middle East will no doubt reduce oil prices whilst favourable weather could reduce grain and oilseed prices.

 

Owen

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