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Traders View

Date Added: 09/12/2011

Large grain stocks versus good vegetable oil demand

Grain and rapeseed prices came under pressure on Friday as the latest USDA report increased stocks of wheat, corn and soya stocks for both the US and the world.

 

Earlier in the week oilseed rape prices had risen led by demand for rapeoil and despite plentiful supplies of rapemeal. Rapeoil prices are expected to remain firm because;

 

1.      Biodiesel demand in EU still good as crude oil hovers around $100/barrel.

2.      Palm oil supplies reducing due to wet weather.

3.      Ukrainian oilseed rape exports curtailed due to poor quality this year and poor establishment for next year.

4.      Biodiesel mandates providing support in the US, Canada and South America

5.      Vegetable oil stock to use ratio at historically low levels.

 

Therefore despite numerous bearish factors of higher grain stocks and general economic woes we still take the view rapeseed prices should stay supported.

 

Regards,

 

Owen

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