29 January 1999

OSRdrops further £10/t

OILSEED rape prices dropped a further £10/t at the start of this week, with ex-farm supplies hitting a new low of £134/t on Wednesday.

This marks a £20/t fall in the past two weeks. It is not just bad news for growers with unsold rape, and there is plenty of that about, with an estimated 25-30% of last years crop still on farm. New crop values have also been hit by a similar amount.

"You wont get £130/t for harvest movement now," says Simon Ward of Group Cereal Services, Andover. "The market seems to be in free-fall."

The main reason is the recent devaluation of the Brazilian real, which has pulled soya oil prices down by about $40/t (£24). The devaluation also knocked Chicago prices, already suffering from the latest USDA forecast of big year-end stocks, says the HGCAs Heike Hintze-Gharres. That, in turn, made EU supplies even less competitive, prompting some hasty selling of up to 100,000t of rapeseed by French and German co-ops last week, further undermining the market.

These co-ops still have plenty to sell. Add to that a large Australian crop, of which 300,000-400,000t is earmarked for the EU (60,000t to the UK alone), and a good-looking South American soya crop, and the chances of the market showing any significant recovery appear slim, says the trade. &#42