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Market quiet ahead of harvest

Date Added: 27/06/2014

By Owen Cligg, Trading Manager, United Oilseeds

Markets are quiet ahead of harvest as most old crop oilseed rape has already moved and main crushers are now closed until mid July. Harvest prices continue to be bid at around £250 ex farm with few sellers at present.

The Statscan report today showed the canola area in Canada at just over 20 million acres which is slightly up on last year and the previous estimate. However as the survey relates to 10th June and wet weather has prevented some acres going in, it may be that area turns out a little lower. EU production of oilseed rape is expected to exceed a record 22 million tonnes. We are also expecting a USDA stocks report on Monday which should confirm how tight soya stocks are within the US. Since the US have already exported their potential surplus most commentators expect a further tightening of stocks which could be supportive to the price. On the other hand soybean plantings are almost complete in the US and conditions better than normal so a big US crop could put pressure on prices in the autumn.

The conundrum regarding oilseed rape is that rapeseed prices are cheap compared to soya and vegetable oils should be supported by crude oil and increasing world biodiesel production. There is also reluctance of the European farmer to sell at perceived low levels. Price direction will no doubt now depend on the ability of EU crushers to source supply and if Ukrainian supply lines are open as they are hoping.




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