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Volatile markets continue

Date Added: 15/07/2016

By Owen Cligg, Trading Manager, United Oilseeds

 We have again seen volatility in the markets this week, with soybeans, matif rapeseed, Brent crude and currency all experiencing wild swings and making a heady mix of changing prices.

 The USDA report earlier in the week kept US 2016/17 soya stocks at anticipated low levels which supported prices, before changing weather forecasts caused prices to fall before rising and then falling again. Matif rapeseed, whilst taking some direction from soya, is proving more resilient to lower prices as the European rapeseed crop is likely to be lower than first thought.

 Poor weather in June is likely reducing seed size and yields France, Germany and the UK. First reports of harvest in France are indeed disappointing, with average yields around 3 tonne/ha. We have also seen a strengthening currency with £1 = €1.20 as the Bank of England kept interest rates on hold, which has taken the shine off prices obtained earlier in the week.

Currently rapeseed prices are valued at £270 to £278 ex farm for harvest depending area.

 Our view is that demand for soya and rapeseed should remain robust supporting prices, whist any supply disruption will be potentially bullish as stocks get drawn down.

 

Regards,

 

Owen

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