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Bearish Usda report causes market to fall

Date Added: 04/07/2014

By Owen Cligg, Trading Manager, United Oilseeds

Monday's USDA report proved unpleasantly bearish as soyabean acres were increased to 84.839 million acres from the 81.493 million acres of the March estimate and 76.533 million acres from the previous year.

This caused soya bean prices to fall sharply by 70 cents on the November position. Matif rapeseed futures also fell but not to the same extent as rapeseed has recently been cheap compared to soya.
Harvest rapeseed prices have also been hindered by a strong currency at £= 1.26 euros, so levels are back to £240.00/tonne.

Whilst the European farmer has been slow to come to market the crusher is convinced he will buy at lower levels. Reinforcing this view is the fact product values are falling quicker than the seed value so crush margins are deteriorating.

Our view is seed will be slow to come to market as many growers are now below the cost of production. The hope is that world biodiesel demand is enough to improve vegetable oil consumption. Other factors are that the reported dryness in Malaysia starts to curb palm oil production and wet conditions in Canada reduce canola production.

Regards,

Owen

 

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