Greasy pole for rape values

RAPE VALUES are on the slide on both sides of the Atlantic after an upturn in the strength of the dollar sparked a sell-off of commodity futures by investment funds.

Ex-farm prices in the UK eased this week to stand at £128-130/t on Friday (Apr 1), after highs of £135/t in mid-March.

But with November contracts trading at a £10/t premium compared with May, farmers are effectively being offered £1.66/t per month to store their crop.

Rape futures at the MATIF exchange in Paris are volatile and lost over £2/t on Friday alone. Oilseed trader Kevin Bantick at Nidera said prices would go lower still.

“There is a large open interest on the MATIF and I would expect the May position to go off the board at the end of the month in a weak way.

“Crushers know that the seed is out there, so it‘s a buyer‘s market.”

The EU‘s 1.3m tonne surplus was weighing on values, he added, and had resisted the inflationary pressure of higher US prices.

But the past two weeks have seen soyabean futures for May delivery fall more than £12/t to £122/t at the Chicago Board of Trade.

And markets barely reacted to figures from the US Department of Agriculture forecasting lower-then-expected soyabean plantings in 2005/06 of 71.9m acres, suggesting a crop of 37.5m tonnes.

David Sheppard, managing director of Gleadell, said that a rally in the dollar had moved the funds in the US to start selling their long positions on wheat and rape.

The rally was sparked by the US Federal Reserve‘s announcement of a quarter point rise in interest rates on Mar 22.