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Bullish factors support rapeseed prices

Date Added: 19/06/2015

By Owen Cligg, Trading Manager, United Oilseeds

A raft of bullish factors are supporting world rapeseed prices, however a strong £ means this is not necessarily reflected in UK prices.

UK harvest price for oilseed rape ranges from to £245 to £250 ex farm depending on area, whilst there is a £10/tonne premium to November. Crushers are expecting growers to sell rapeseed at harvest as the value looks good compared to wheat and the cash may be required. Our opinion is that tight old crop supplies and a delayed harvest may mean values need to improve against November to encourage farmer selling. At present, there is little activity as sellers wait for better prices.

The main reasons for optimism on prices can be listed as follows;

1.      EU osr production being downgraded in France, Germany and Poland as dry weather is limiting
         yields

2.      Canadian situation still uncertain as up to 10% of canola has been reseeded due to frost damage
         and current dryness likely to impact on yield potential

3.      Lower osr plantings and dry weather in Australia will limit export potential

4.      Chinese stocks of rapeseed likely overstated so import requirements may be higher.

5.      Biodiesel mandates still in place in EU

6.      El nino likely to impact on palm oil production

7.      US biodiesel mandates are supporting soy oil prices.

 

Of course, the increasing world soybean stocks are still a bearish factor. However, soybeans have shown some price rises recently as wet weather in Southern US has delayed plantings and is likely affecting yield potential.

 

Regards,

 

Owen

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