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Commodity sell off

Date Added: 06/05/2011

Commodities saw a big sell off on Thursday with crude oil down $9 to $10 dollars.  Soya, corn and wheat were also impacted on Chicago markets.

Matif oilseed rape showed some resilience only falling 3-4 euros as a weaker euro offset some of the downward pressure.  However the £ seems to be caught between the stronger dollar and weaker euro and had strengthened to 1.13 euros by Friday compared to 1.11 euros on Thursday.  This of course reduces values in sterling terms.

There is no doubt that some of the recent strength in oilseeds is due to high crude oil prices which encourages biodiesel production.  However with few physical sellers due to weather concerns we feel there is every chance the market will recover on new crop whilst uncertainty on crop yields remains.

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