Weaker sterling lending support

Posted: 21 Sep
Trader's View: By Owen Cligg, Trading Manager,United Oilseeds

Matif rapeseed prices have continued to drift looking for technical support at 361.00 euros for November. A bounce in Chicago soyabeans has helped matif prices rebound slightly but the market seems to be now looking for new direction. Sterling prices have been helped by a weaker pound as Brexit talks stumble. Ex farm prices in England for October are in a £310 to a £315/tonne range, whilst Scottish rapeseed has stopped trading as the export programme waits for new input. Our current estimates for the UK and EU crops are 2.0 and 19.5 million tonnes respectively. The UK has already started importing French seed into Erith as the exportable surplus is minimal. The EU will need to rely on Australian imports from December onwards, however recent frosts could downgrade their crop size to below 2.8 million tonnes as some fields get cut for forage. Canadian supplies should hold up as Statscan production estimate has increased to 21 million tonnes, but adverse cold and snow could yet reduce this figure.
There have been some worries about new crop plantings in the UK and Europe. Flea beetle attacks have become more prevalent in England which will no doubt reduce the established area. Dry conditions and low prices in France and Germany are major causes for concern. UK prices are well bid at £300 ex farm for harvest 2019.
Our view is that there are enough issues in the market place to give some optimism prices could yet recover.

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