27/11/15 TRADER'S VIEW
By Owen Cligg, Trading Manager, United Oilseeds
UK OILSEED RAPE PLANTINGS LIKELY TO BE WELL DOWN FOR 2016 HARVEST
Rapeseed prices in the UK have shown some signs of improvement as matif prices have recovered from recent lows. Prices for December are now over £250.00 ex in most areas of England, whilst the price in Scotland should be achievable in the spring.
Soya prices have improved since the initial sell-off after the results of the Argentine election, but there seems to be no bull story in the immediate future. The general consensus is that we need to wait until the new year for a weather problem before prices can appreciate significantly.
On Thursday United Oilseeds announced its estimates for 2015 harvest production and 2016 plantings of oilseed rape within the UK. 2015 production was estimated at 2.42 million tonnes from on area of 630,000 hectares with an average yield of 3.85 tonnes per hectare. Whilst 2016 harvest area is estimated at 536,000 hectares, representing a decrease of 14.9%. Assuming an average yield of 3.75 tonnes/hectare this puts anticipated production at little more than 2 million tonnes. Our opinion is that the lower production should give more opportunity for an improvement in prices. However it should be noted most analysts are assuming EU rapeseed area to remain close to unchanged and hence forward prices are a discount to the current marketing year.