Oilseed rape prices rise as crop estimates fall

Oilseed rape prices are rising as the likely crop size falls.

Both old and new crop have benefited from the latest crop estimate from analyst Strategie Grains, which reduced its estimate of the EU crop by 470,000t to 18.9m tonnes.

This compares with the 2018 EU harvest of just under 20m tonnes.

However, the dry weather, disease and flea beetle challenges mean many traders put the 2019 crop closer to 18m tonnes.

Crops in France, Hungary and Romania are all suffering and in some cases on reduced areas, but Ukraine has expanded its area by 29%.

See also: Oilseed rape advice 

Traders put the UK’s likely crop size at about 1.7m tonnes, compared with about 2m tonnes last year.  

All Paris Matif futures contracts have been on an upward trend since early March.

With crushing demand strong, a weaker sterling has also helped UK prices recently. These averaged almost £305/t spot ex-farm as Farmers Weekly went to press on Wednesday 1 May.

The regional range was from £303-£310/t, other than in North-east Scotland which was down at £288/t.

Old crop is trading on average about £5/t above new crop values, which mostly range from £298-£308/t, as available for July.

The recent price rises have encouraged little grower selling interest.

“The £300/t mark would normally encourage some sellers but it’s a different prospect selling 3t/ha at £300/t compared with 4t/ha at £300/t,” said Owen Cligg, trading manager at farmer co-op United Oilseeds.

However he said those who needed harvest movement and/or harvest cash should probably do some tonnage at current prices.

While the UK traditionally exports early oilseed rape cargoes, the lower crops size means this is less likely to be the case this year.

There are bearish factors too, including high end-of-season global oilseed stocks because of China’s trade disputes with both Canada (on alleged contamination of oilseed rape shipments) and the longer-running dispute with the US.

Although the Canadian rapeseed area is down 6.6% this year, it is only slightly down on the five-year average.

Canadian GM oilseed rape is being imported to the EU for crushing in large tonnages, with the oil going into biodiesel. There is a limit to this trade as not all of the Canadian crop meets the EU’s sustainability criteria, according to Mr Cligg.

In contrast to the rising rapeseed market, soyabeans are under pressure because of the US-China trade dispute and high supplies.

US cropping decisions will be made in the next few weeks as to whether to sow corn and wheat or soyabeans. Wet weather is pushing growers towards soya as the window for corn planting closes over the next few weeks.