O S RAPE
THREE factors are set to dominate the oilseeds business in the next few months.
• Movements in soya prices as the South American crop comes off.
• The amount of oilseed still on farm.
• The demand – or lack of it – for vegetable oil.
Prices since harvest have been much less volatile than last year, climbing steadily from about £160/t to £183/t by the end of December.
But mounting concern over the lack of rain in Brazil and Argentina has led to a stronger trade for January to March, with £188 to £190/t now quoted ex-farm as rising soyameal prices have dragged up rapemeal prices .
Any further increases, however, are likely to be tempered by the unusually high stocks held in farm stores – over 40% of the crop, according to some trade estimates.
It therefore seems unlikely that £200/t will be reached, for as soon as that magic number approaches, more supplies will be sucked off farm.
The one thing that would really boost the trade, however, would be the re-emergence of some major oil buyers, in particular the Chinese. But they reportedly have good stocks, and the oil side of the equation is expected to remain flat.
New crop prospects are much more bullish, with £185 to £187/t ex-farm quoted for harvest.
A switch from oilseeds to wheat to take advantage of the buoyant world grain market is predicted on both sides of the Atlantic.
Provisional figures on spring planting intentions in Canada suggest a possible 14% drop, which would take at least 1m tonnes from their crop of 7m tonnes.