The UK is set for a record oilseed rape harvest as DEFRA’s latest planting survey shows farmers have drilled 18% more of the crop this year.
The increase means the UK is on course to achieve its first 2m-tonne crop, although some traders questioned DEFRA’s figures claiming a more realistic growth in planting was about 8%.
Coupled to the expected hike in production, they said a slackening of the biodiesel market on The Continent meant growers should keep an eye on oilseed rape prices.
“Prices for the old crop are drifting downwards due to a lack of demand, and that seems to be affecting the new crop,” David Whyte, of United Oilseeds, said.
“The problem is the biodiesel market has stalled. Crushing facilities that were supposed to come online haven’t and it’s caused a surplus.
“Our main export market for oilseed rape is Germany but they have had a 30% reduction in biodiesel forecourt sales. It’s a case of where it’s going to go – things aren’t looking quite as rosy.”
Jonathan Lane, oilseed trader at Gleadell Grain, said the expected surplus of about 250,000 tonnes was likely to be exported to Germany and the Netherlands, but said prices were difficult to predict.
“Providing we don’t have any significant crop losses or problems at harvesting I would struggle to see our market holding at current prices,” he said.
“Crushers’ margins have been reduced and they will take a lower-quality seed rather than pay a premium for oilseed rape.”
Nick Oakhill, a trader at Glencore, said farmers should look to sell some of their crop while prices were still reasonably high.
“Growers responded to forward prices while they were drilling, which is why we have an increase in planting.
“But I think if people can, they should be selling a percentage of the crop – it’s very good value.”