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United Oilseeds Trader's View - by Owen Cligg

Date Added: 13/07/2012

US Crop Disaster

Prices of cereals and oilseeds have continued to rise this week as concerns mount over the extent of potential losses of corn and soya in the US. Drought conditions continue in much of the Mid West with little sign of much needed rain. The severity of the situation was highlighted by a USDA report on Wednesday when yield forecasts compared to the previous month were reduced by 20 bushels per acre to 146 bushels on corn and by 3.4 bushels per acre to 40.5 bushels on soya. Whilst there are reports of corn dying in the field, there is still time for soyabeans to recover given rain at the end of July and August. The USDA is also assuming higher prices will ration demand allowing stocks to stay above minimum required levels.

As regards prospects for oilseed rape, harvest has started in the Ukraine and France, with yields higher than expected in Ukraine whilst the first yields in France are reportedly poor to average. Conditions look better than previously expected in Germany, but the weather in Northern France and the UK currently remains threatening to say the least.

Prices of oilseed rape are touching contract highs, mainly being held back by a stronger currency of £1.00 =1.27 euros. Values are between £375 to £380 for harvest and around £390.00 ex for the autumn.

Regards,

Owen

 

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