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Market sets back on outside influences

Date Added: 24/06/2011

Prices of oilseed rape have fallen this week as commodity markets generally have seen a large sell off.  The wheat market especially has seen large falls precipitated by the selling of cheap optional origin wheat to Tunisa which is likely to come from the Ukraine. Better than expected wheat yields in Kansas also pressured the market which spilled over to a lower corn market. There is also a perception that wheat yields will be better in Europe than first anticipated. The drop in prices was also compounded by a large fall in the crude oil market with strategic reserves being released to dampen prices. Soya and rape prices have fallen accordingly but selling seems to be mainly fund liquidation on the futures markets.

 

The last week has seen little farm selling as growers are reasonably well sold already and seem happy to wait for harvest before any further commitments. The first yields of oilseed rape in France have been lower than last year, though better than expected. A truer picture of yield potential should develop next week as the French harvest progresses in to the major production areas. The size of these yields will no doubt help give some direction to the next movement in price.

 

Regards,

 

Owen

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