Oilseeds drop on larger global crop; grain stays firm

Oilseed markets have dropped sharply following the US Department of Agriculture’s latest global production estimate, with soya forecasts exceeding analysts’ expectations.

A 3m tonne increase in US soya production contributed to a 4m tonne increase in the global oilseed crop, to 462m tonnes. As a result, speculators sold heavily, with Chicago soya futures dropping to a four-month low. “We may have to see prices come lower before buyers step back in,” said David White, commodity trader at United Oilseeds.

“However, crushers have tonnage to buy in the new year, which may bring support back to the market. There is no doubt that stocks will tighten until the South American harvest starts in February/March.”

Oilseed markets remained underpinned by strong Chinese import demand, said a report by HGCA. “There are also early indications of possible production issues in Argentina, as heavy rains slow planting.”

French rapeseed futures dropped by €14.50/t (£11.60/t) at the start of the week, to €464/t (£372/t) for February on Tuesday. Domestic rapeseed markets fell by almost £8/t in the week to Wednesday, to about £357/t ex-farm for spot movement. However, feed wheat markets remained firm, rising by £1/t to about £206/t ex-farm, with barley up by more than £3/t.

Read more

For more market reports see our Prices and Trends page.