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Date Added: 11/11/2011

11/11/11

 

Glass half full

 

Oilseed rape markets have been quiet this week as buyers and sellers remain apart on their aspirations regarding price direction.

 

The USDA report on Wednesday reduced yields for corn and soya but increased ending stocks for both commodities due to reduced demand. The result was a selloff of soya beans whilst corn held its value. The price of soya beans now looks cheap in relation to the value of corn, which will encourage corn plantings at the expense of soya in both South America and the US.

 

Some commentators now put a bearish slant on the market due to potential reduced demand issues. We however prefer to see the glass half full rather than half empty due to the following points;

 

1.      Crude oil is now approaching $100/barrel on WTI, having been $83/barrel only 2 to 3 weeks ago

2.      Ukraine and Germany have issues regarding new crop osr plantings and conditions

3.      UK growers are probably already 80% sold on osr reducing new potential supply

4.      UK osr exports remain brisk

 

Regards,

 

Owen

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