OSR prices pressured by global supply and fund selling

Oilseed rape futures have been broadly steady, with geopolitical uncertainty and concerns over European crop establishment providing support, while ample global supplies and fund selling have limited gains.

The May 2027 Paris rapeseed futures contract fell 1.7% in sterling terms last week to about £461.50/t, according to the AHDB. The decline was greater than in euros as sterling strengthened against the single currency.

Frontier said weakness in the November Paris contract had been driven partly by low water levels on the Rhine, disrupting rapeseed movements and increasing transport costs. Speculative fund selling had also contributed to the wider market correction.

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United Oilseeds managing director James Warner said geopolitical concerns, particularly around the Strait of Hormuz and the Black Sea, continued to underpin prices by maintaining a significant risk premium.

“Concerns over crop establishment across parts of Europe are also helping to support values,” he said.

However, ample global grain and oilseed supplies were preventing a significant price recovery. US soyabean harvesting continued at pace, while progress with the Canadian canola harvest was adding to overall availability.

Mr Warner said heavy selling by managed money funds had also capped gains in European rapeseed futures, with investment funds having reduced their record long position by about half over the previous three to four weeks.

European supplies

Despite pressure from global oilseeds, European rapeseed availability remained relatively tight. Frontier reported that EU rapeseed imports were about 11% below the same period last year, while reduced Ukrainian exports and uncertainty over Black Sea shipping had constrained supply flows.

Demand from European crushers and biodiesel producers continued to underpin the market.

Attention was also turning to the 2027 harvest, with dry conditions in parts of central and south-eastern Europe raising concerns over crop establishment. Any impact on production remained uncertain, but persistent concerns could add a weather premium to forward prices.

AHDB said the May 2027 Paris contract was trading below its 20-day and 50-day moving averages in sterling terms. In euros, it remained close to the key level of €550/t, which could offer support if maintained.

However, exchange rates remained important, while developments in the Black Sea and South America could influence prices. A weaker Brazilian real could make soyabeans more competitive internationally, adding pressure to the wider oilseed market.