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Markets down as consumers more relaxed on supply

Date Added: 18/12/2015

By Owen Cligg, Trading Manager, United Oilseeds

Oilseed rape prices have fallen back from recent highs of two weeks ago as Matif levels have fallen from over €380 to a recent low of €368 in the February position.  Some of this loss has been mitigated by a weaker sterling, but broadly, prices have fallen to a level either side of £250 ex farm depending on location and month of movement. There are many complex factors involved in the market, some of which are as follows;

1.      Soya prices trading in a range of $8.50 to $9.00, supported by dryness in Brazil whilst reduced by a
         change of Argentine economic policy which lowered tariffs and allowed the peso to devalue.

2.      Defra has increased UK oilseed rape yields to 3.9 tonnes per hectare from their previous estimate
         of 3.5 tonnes per hectare.

3.      UK oilseed rape plantings are well down, circa 15%, which will tighten UK supply and demand from
         next harvest.

4.      Ukrainian oilseed rape plantings are also well down

5.      No snow cover on Eastern European crops, increasing the risk of winter kill in the event of sudden
         low temperatures.

6.      Some Canadian imports of GM canola working their way into the EU to be used for biodiesel
         production, whilst GM rapemeal needs to be sold at a discount.

7.      El nino still likely effect palm oil yields in Mayalsia and Indonesia.

8.      Australian canola already committed in large volumes to the EU, with a potential lower crop size
         of circa 3 million tonnes.





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