TRADER'S VIEW: BY OWEN CLIGG, TRADING MANAGER, UNITED OILSEEDS
UK ex farm rapeseed prices are currently trading in a range of £280 to £290 as Matif prices remain under pressure below 350.00 euros for the May position.
The decline in the matif price since November from 387.00 euros has been very striking, but can be partly explained by the strengthening euro which has increased from 1 euro = $1.17 to 1 euro = $1.22 today. The strength is even more pronounced when you consider this time last year that 1 euro was only $1.05, and it was suggested there could be euro dollar parity. Thus the euro's strength has encouraged rapeseed imports from Australia and Ukraine, whilst the European farmer has been a reluctant seller.
Demand for rapeseed within the EU has also been curtailed as Argentinian biodiesel has continued to arrive, but this may soon be reduced if fears for Argentinian soya harvest materialise. The crop there is in trouble, as dry weather has reduced soya plantings and yields potential.
Latest estimates could put the crop size down to 47 million tonnes which would be lowest in 5 years and well below a recent high of 60 million tonnes.
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