Weak pound and possible UK deficit push up oilseed prices
© Tim Scrivener Rising European rapeseed oil markets are pushing farmgate oilseed rape prices higher, with UK values propped up further by sterling’s weakness.
The prospect of a UK oilseed rape deficit this season is also adding to the pressure.
UK prices were at a premium to European prices, rather than the usual discount, as a result of the tight UK supply, said AHDB analyst Arthur Marshall.
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Spot ex-farm values averaged £339.2/t midweek, a rise of almost £10/t on the week. Around the regions the range was £328-£345/t.
UK spot values have put on almost £100/t since late June.
The entire vegetable oil complex had a strong start to the week, with Malaysian palm oil production expected to remain subdued over the next few months and US soya bean demand high against a background of lower than expected soya bean oil stocks, said Mr Marshall.
Stronger vegetable oil prices were benefiting crush margins in Europe, which in turn supported rapeseed demand and prices, with Paris rapeseed futures close to levels at which they last traded in 2014.
At the AHDB’s Cereals and Oilseeds Outlook conference recently, biofuel and oilseed market analyst Christophe Cogny of analyst Strategie Tallage said globally the market was bearish for oilseed meals and while the vegetable oil situation was tight, crude oil prices would cap the potential for oilseeds price rises.
However EU rapeseed prices should be supported, with the market likely to be tight again next year as only a small increase in the EU rapeseed area was expected, said Mr Cogny.