Spot oilseed rape values lost about £10/t this week, following a big drop in French oilseed rape futures prices.
With poor crushing margins and no real improvement in prices further forward, some crushers have been looking to offload stock to shorts and exporters.
While UK supply from domestic production is tight, new crop Australian oilseed rape is on its way to the UK and this, alongside slightly stronger sterling and soya bean crop news, has contributed to the softening of prices.
Ex-farm values ranged from £345/t-£352/t spot on Friday (3 February), with most offers were at the higher end of this scale.
This price range reflects a £360/t delivered price for crushing at Liverpool.
With the current market background, the market is offering less than £1/t a month to carry rapeseed forward over March and April so trade is expected to be relatively quiet, with stocks and imports mainly likely meet crushers’ requirements during this period.
“There is an inverse on rape oil prices, meaning prices are lower in the forward positions so crushers do not want to own rapeseed past the spot position,” said United Oilseeds trading manager Owen Cligg.
“We are therefore reliant on rape oil demand remaining buoyant so that forward prices can rise to keep rapeseed prices at current or better levels.
“European rapeseed supplies are still tight and a high level of imports are still required to meet EU demand.
“On paper this should be possible with a better than expected Australian crop.”
At about £320/t ex-farm for harvest, new crop prices were better than in many seasons but few growers were being tempted by this, said Mr Cligg.
Other oilseed market factors
- UK and French plantings are down but traders are hoping for a return to trend yields to restore higher EU production.
- Despite a downwards revision to its crop forecast this week, continued weather improvement in Argentina put pressure on soya bean markets, in turn pushing down global rapeseed prices.
- Brazilian soya bean exports are running at a high level (0.912m tonnes in January – up 0.518m tonnes year-on-year)
- Increased export sales have pushed up US soya bean prices
- Wheat prices ended the week almost unchanged, with feed wheat averaging £141.70/t ex-farm for February.