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Date Added: 05/04/2013

Oilseed rape prices on the defensive

 

Since last week’s USDA stocks report, oilseed prices have fallen as fund managers have been quick to exit their long positions. The perception is that feed demand especially for corn has been a lot lower than expected and hence stocks are higher than expected. There is however another USDA report on Wednesday 10th April which will analyse supply and demand, the issue being how much demand is reduced or whether last year’s production is increased to account for the higher stocks. It is possible that demand will not be reduced as much as expected so that stocks will still be perceived as tight at the end of the season. If this happens there could be some recovery in the market.

 

Meanwhile cold weather continues in the UK as well as Europe which should encourage spot demand whilst put a question mark against future production. However reports of bird flu in China have been negative for the market, but in the absence of buyers and sellers the market remains thinly traded.

 

Oilseed rape prices are valued at around £375.00 ex for old crop and £340.00 ex for harvest. If soya plantings and yields in the US proceed as expected the market could fall further however we only need a weather problem to cause prices to reverse higher.

 

Regards,

 

Owen

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