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Oilseeds showing signs of Chinese Indigestion

Date Added: 21/03/2014

By Owen Cligg

 

Despite wheat prices showing recent strength and trading over £160/tonne on LIFFE November futures, oilseed rape prices have failed to show any real upside impetus. Old crop oilseed rape is valued at £320.00 ex, whilst harvest is £275 to 280 ex farm.

Prices had made good progress earlier in the week as soya prices in the US remained supported due to continued good export movement and new sales. The market had been expecting Chinese cancellations but it would seem that freight has already been organised and difficult to unwind. Instead, there are now rumours from China of Brazilian cargoes being cancelled and vegetable oil stocks being released which has put downward pressure on the market.

Going forward there are still concerns regarding palm oil supplies, as only limited rainfall is arriving in Indonesia and Malaysia. Also, whilst the situation in Ukraine remains in flux there does need to be a risk premium built into price to cover any disruption to future supplies.

Regards,

Owen

 

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