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Oilseed rape market tightening as barn door closes

Date Added: 08/08/2014

By Owen Cligg, United Oilseeds Trading Manager

 

Rapeseed prices have risen to over £230/tonne in England as most of the country has completed harvest.

In Scotland, prices remain at a discount as the market is reliant on exports.There does seem to be a big divergence in yields as the opposite to last year seems to have occurred. We are hearing of Verticillium Wilt problems in the south, with many yields in the region of only 3 tonnes per hectare, whilst yields in the north and especially Scotland are significantly better.

Our average estimate for the UK is currently 3.5 tonnes/hectare which should give a final production figure of 2.4 million tonnes. Exports are still brisk at present and we estimate 300,000 of the potential 500,000 tonnes surplus are already committed. With most of the remaining surplus in the north east and Scotland, this should mean the UK crushers need to bid up against export values in order to maintain continuity of supply.

Next year's plantings will no doubt be down, we estimate about 20%. At present, the crushers are only interested in this season and it maybe that the cure for low prices is low prices, as a smaller supply will tighten the balance sheet next year.

Regards,

Owen

 

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