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Traders View

Date Added: 19/07/2013

Oilseed Rape struggling to find friends

Oilseed rape prices have continued to fall this week, with harvest values in a range of £300 to £305 ex farm. Expectations of a large crop of up to 21 million tonnes in the EU are weighing on prices, with one latest estimate putting the German crop at over 6 million tonnes. Harvest is progressing well in Romania, Hungary and Bulgaria with good yields reported.  Although harvest has started in France, there are no confirmed reports of yields. UK harvest should start next week, but with many crops still to be desiccated, we are not expecting any weight of harvest until August.

Price weakness is mainly coming from pressure on rape oil prices, which is not helped by the uncertainty of biodiesel demand. Rape oil is then having to compete against potential high supplies of sun oil from the Black Sea and also cheap soy oil supplies from Argentina.

Meanwhile, rape meal prices continue to be supported by a tight soya meal market which is unlikely to be relieved until the arrival of the US soya harvest.

A reversal in prices will no doubt be dependent on Chinese demand and/or an improvement in biodiesel demand. Also, weather conditions in the US  could yet provide some light at the end of the tunnel if they turn detrimental to corn and soy.  Meantime, many growers are committing rapeseed tonnage to store to hopefully wait for a better day.  Indeed, it can be argued that wheat values look better value than rape at present, which could help diminish any harvest pressure which may arrive.





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