23 May 1997

New crop OSRfeels the pinch as plantings rise

OILSEED rape prices have come under severe pressure, both on old crop and on new.

Three weeks of near-perfect weather in the US has led to a big increase in soya plantings, with 90% of the crop in the ground by mid-May.

In Canada, canola plantings have overcome initial flood problems, with the 1997 crop estimate now 28% higher than last year at 6.4m tonnes, according to OilWorld.

These bearish factors have caused new crop prices to drop worldwide, including the UK, where August ex-farm supplies are now quoted at about £152-£154/t, down £7 in the space of a week. But, after allowing for the 20% rise in currency in the past 12 months, this is equivalent to where the market was last harvest, says Jonathan Gaylard of Banks Agriculture.

Old crop has also taken a big hit, dropping over £10 in the past week to £155/t spot, due to supply pressure. Traders have been revising up their estimates for 1996 harvest all season, and some now believe the crop was as big as 1.5m tonnes, compared with initial thoughts of 1.15m tonnes.

Certainly there are still significant parcels out on farm, though farmers are now calling it a day and selling them, to clear their stores before harvest. Unfortunately, all UK crushers are already fully covered.