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USDA continues bearish theme

Date Added: 12/09/2014

By Owen Cligg, Trading Manager, United Oilseeds

The latest USDA report published on Thursday reinforced the continuing bearish theme. Potential US soya yields were increased to 46.6 bushels/acre whilst corn yields were increased to 171.7 bushels/acre. November soyabeans subsequently hit contract lows but have now recovered to over $9.80 per bushel, but this still remains at a 4 year low and below the psychological $10 a bushel.

UK rapeseed prices have now dipped below £240.00 ex farm in most areas for September or October movement. It could be said though that this is looking better value than feed wheat which is only valued at £112.75 for November wheat futures. However, we expect demand for rapeseed to remain robust, especially at these lower prices. Rape oil is competitively priced to go into biodiesel which should limit the downside.

As regards plantings for 2015 harvest, we at present estimate the area may be down 15%, with potential further reductions due to flea beetle damage. This should go some way to supporting prices, especially as plantings are likely to be down in other parts of Europe as well.




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