Ex-farm oilseed prices rally on tight EU supply concerns

Arable farmers are receiving a better return for oilseed rape, with prices having climbed by more than £30/t since the beginning of the year.

Oilseeds markets are looking bullish and likely to stay well supported, with strong interest from buyers and tighter supplies forecast throughout Europe for this year’s harvest.

Delivered oilseed rape prices on 13 May ranged from £378/t to £400/t for June and up to £417/t for November.

See also: UK plantings improve but still poor as wheat hits £190/t

Ex-farm prices collected by Farmers Weekly ascended to £382.9/t on 15 May.

United Oilseeds managing director James Warner said: “With smaller crops across the UK and Europe, the European rapeseed market is rallying strongly as it tries to buy additional acres to go in the ground this autumn for harvest 2025.

“Since the turn of this year, oilseed rape values have been by far the best-performing commodity in the sector, with futures prices up 10% since January.

Mr Warner added: “The market is sending a very clear signal and with the higher flat price, gross margins have significantly improved, which should warrant some further discussion around sowing plans this autumn. The demand outlook for rapemeal and rape oil continues to be incredibly robust.”

Traders at Frontier Agriculture said that despite ample farm supplies, there was still strong demand, particularly for difficult-to-source positions in July and August.

However, they added that market dynamics could shift as demand was satisfied and new crop values stabilised.

Trade

The UK remains a major net importer of oilseeds, according to HMRC trade data.

Rapeseed exports totalled 27,570t in the first nine months of the 2023-24 crop year (July to March) compared with 17,638t the previous year.

During the same period the UK imported 655,826t of rapeseed, an increase of roughly 50,000t on the previous year.

Global drivers

French grain consultancy Strategie Grains forecast this summer’s EU rapeseed crop at 18.1m tonnes, down 9% on last year’s levels.

The firm’s analysts said crop development in the main EU producing countries was “quite satisfactory” and warmer weather had meant crops were at an advanced stage of growth for the time of year.

The EU Commission is slightly more optimistic, forecasting that EU rapeseed production could reach 19.8m tonnes.

The Commission’s short-term outlook predicts that both EU imports and exports will remain relatively stable in 2024-25.

Global markets are being supported by cuts to Russian crop estimates as a result of frost damage, and dry conditions in Australia and Canada.

The Grain Industry Association of Western Australia (GIWA) said its crop area would be down this year as growers held back planting due to the dry conditions, and that it was now close to being too late for these to go in.

Last Friday, the US Department of Agriculture forecast higher soybean production for South America, the US and South Africa as part of its 2024-25 global oilseed outlook.