Rapeseed prices dip back on weaker Matif values

Posted: 22 Nov
Trader's View: By Owen Cligg, Trading Manager, United Oilseeds

Rapeseed prices are heading back to £320 ex farm for England as Matif prices have faltered from their recent high of 392 euros for February. The current February value is 389 euros, but we expect support at around 385 euros as vegetable oil demand remains strong. Palm oil prices in particular are continuing to climb and biodiesel demand remains good.

There are also concerns about movement of Canadian canola as some of the harvest may stay in the field until the spring due to snow cover, and also rail strikes may hold up deliveries.

On the bearish side of the argument, soya prices have fallen as a US/China trade deal seems more out of reach but we would hope values find support at the recent lows.
Looking forward to next season, there are obvious concerns about plantings of oilseed rape in the UK.   A drop of 20% in harvested area could suggest over 0.5 million tonnes of imports into the UK will be needed for harvest year 2020/21. As with this year some of this may come from countries where neonic usage is permitted, such as Ukraine or those EU states with a derogation.

Plantings are also lower in France and not recovering in Germany, so it is likely major imports will also be required into the EU as a whole.  Reports suggest that Ukrainian plantings will be down, so the current August 2020 Matif level of 371 euros would seem undervalued.
Best regards,

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