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United Oilseeds Trader's View - by Owen Cligg

Date Added: 20/07/2012

SOYABEANS AND CORN HIT RECORD HIGHS

Markets continue to be dominated by potential crop losses in the US for soyabeans and corn. Both soyabeans and corn hit record highs this week and increased media coverage seems to fuel the bull momentum.

Bullish and bearish arguments can be summarised as follows;

Bullish

1. Hot, dry weather in the US supporting world markets.
2. Crude oil prices improving
3. EU osr crush capacity exceeds EU supply necessitating large osr imports
4. Imports of osr will be expensive as world demand is robust
5. Biodiesel mandates will need to include rape methyl ester in the cold winter months
6. Fund speculation fuelling the bull market
7. Lack of protein feeds supporting rapemeal prices
8. UK osr yields could be effected by poor weather

Bearish

1. Sterling stronger against the euro, currently £ = 1.28 euros
2. Record prices on Chicago and Matif, can it go higher?
3. Biodiesel demand still poor
4. Vegetable oil prices lagging versus protein prices
5. Larger than previously expected osr crop in the EU, likely to be 19 million tonnes  rather than 18 million as yield prospects have improved in France and Germany
6. Speculators may liquidate long positions
7. Large South American soya harvest likely next spring
8. Record canola crop in Canada could impact on prices in the autumn


Owen Cligg

 

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