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Rapeseed prices holding up well

Date Added: 29/07/2016

By Owen Cligg, Trading Manager, United Oilseeds

As harvest progresses in the UK, rapeseed prices have firmed as there is a realisation that yields in Northern Europe are not as good as initially expected.  We now expect crop sizes in France and Germany to both be below 5 million tonnes, and the UK crop to be a 7 year low at around 1.8 to 1.9 million tonnes.  Harvest prices are now in excess of £280 in England, with a £5 discount in Scotland. A weaker pound, now £1 = €1.184 is also supporting prices.

Counter to the bullish rapeseed story, there is a declining price scenario for soya.  Soya prices on Chicago are now at 3 month lows and sub $10 a bushel in the forward positions.  Final yield reports from Argentina are better than initially expected.  Also the previous surge in Chinese shipments from Brazil may be a function of better loading conditions and limited strike action rather than a real increase in demand. The weather in the US is also currently non-threatening and funds have decided to exit some of their long positions.

Our opinion is that soya prices have been over inflated anyway and the current decrease is only a return to more historical soya/rapeseed price relationship.









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