Farmers should consider capitalising on recently improved oilseed rape prices, according to United Oilseeds‘ Owen Cligg.
Since the middle of January, French rapeseed futures have been steadily increasing, despite a static US soya market. May futures reached €294/t on Wednesday (17 March) – a rise of more than €10/t over the past two months.
Crude oil prices have also risen, encouraging many commodity traders to hedge funds against biodiesel.
In addition, the pound has weakened against the euro, improving the UK’s exports competitiveness. “Now is therefore a good time for many growers to think about forward-selling their crops,” says Mr Cligg.
A number of factors could cause the market to slump later this year, he warns. “There is an oversupply of old-crop oilseed rape within the UK that needs to be exported. And the supply and demand of oilseed rape within the EU has been balanced by imports of up to 500,000t of Australian rapeseed.
“The large carryover of cereals will put pressure on storage capacity at harvest time and this will be exacerbated by this season’s larger UK plantings of OSR, which are estimated to be up to 9% up on winter oilseed rape alone.”