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Brexit fears keep currency weak

Date Added: 08/04/2016

By Owen, Trading Manager, United Oilseeds

One of the main features of recent trade has been a weaker sterling which is boosting sterling values of oilseed rape as export values become more competitive. Currently a value of £1 = €1.237 is maintaining ex farm rapeseed values for old crop in a range of £270 to £275 ex farm. New crop values for harvest are well bid at £260 to £268 ex farm depending on area.

Although supplies of grains and oilseeds at present seem to be adequate, recent strength in the oilseeds markets may be coming from unexpected demand. Palm oil prices have continued to appreciate as stocks tighten which is helping demand for other vegetable oils. Also soya prices continue to trade above $9 a bushel as Chinese imports continue at higher than expected levels.

Our view is that currency weakness because of the continued threat of Brexit will likely support prices in the short term. Also, exports are at a pace that should easily move any surplus. This should help harvest values, as it is noticeable that this year may see good farmer rapeseed selling which will allow old crop wheat stocks to carry over to the autumn.

 

Regards,

 

Owen

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