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Soybeans lead oilseeds market higher

Date Added: 15/04/2016

Owen Cligg, Trading Manager

This week has seen a significant appreciation in US soya values to $9.50 a bushel in the May position. A welcome but perhaps surprising move in the spectre of high world stocks, this can be attributed to the following:

Wet weather in Argentina delaying soya harvest and likely to reduce yields.

Likelihood of impeachment of the Brazilian president is continuing to strengthen the Brazilian real, making their soybeans less competitive to export.

A slightly weaker dollar improving US competitiveness and with restricted supply from South America, this makes the US the main shop in town.

Fund buying as they see soya as an appreciating asset.

Improved import demand to China.
 

With regards to UK rapeseed values, these have held at £270 to £275ex for old crop despite sterling appreciating to £1 = €1.255. May matif is trading at around €370.00 which is likely supported by option expiry. On the face of it, matif looks expensive in relation to crush margins and potential higher western European stocks. Whilst old crop may run into sellers, we expect new crop to be supported and harvest is still avaliable at £260.00 to £265.00ex farm.

 

Regards,

 

Owen

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