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Stronger sterling negatively impacting osr prices

Date Added: 17/07/2015

Owen Cligg, Trading Manager

Rapeseed prices have fallen back to a range of £250 to £255 ex this week, as a strong £ has reduced UK export competiveness. £1=1.434 euros or 1 euro at £0.6967 puts sterling at yearly highs and can be attributed to the prospect of higher interest rates and continuing Greek uncertainty.

Soya prices have retracted recently, but that is also no doubt a currency issue as the strong dollar also makes US soya exports less competitive. As regards to US soya harvest prospects, these remain uncertain as wet weather has continued to reduce crop ratings. Most commentators though now seem more focused on weather in August which is the critical month for crop development.

World rapeseed prices are supported by the spectre of lower yields in the EU, Canada, Ukraine and Australia. Rape oil prices have developed a premium to soy oil prices, whilst rapemeal is beginning to become expensive against other proteins. All in all, crushers are going to cope with lower margins which will not entice them to book forward business. Given these scenarios we expect markets to be volatile in the coming weeks.

 

Regards,

 

Owen

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