American investors lift UK oilseed values

By Sam Fortescue

A FLURRY OF activity by investment funds across the Atlantic has helped boost oilseed values to highs not seen in this country since the autumn.

 In the first half of this week, oilseed rape prices jumped 3/t. Overall, values have risen 10/t in the past six weeks in response to a rally in Chicago soya futures, which have risen by 33/t over the same period. Domestic traders say the hike has been driven by investors looking for profits in commodities, outside the reach of America”s economic problems.

 “There has been a big swing by funds into commodities generally, with the soya and wheat markets in their sights,” said Mark Smith, oilseed trader at Gleadell.

Ex-farm values in the UK range between 132 and 135/t, and traders say that farmers have a chance to lock in better prices for both old stock and the current crop.

 “It”s a good selling opportunity for farmers with old stock, or for taking a look at new crop prices. They can get 130/t ex-farm at harvest time, or 140/t around the end of the year,” said Mr Smith.

John Thorpe, oilseed trader with Centaur Grain, also said it was a good time for farmers to sell.

 “The window of opportunity for selling old crop is getting smaller all the time, while prices for November are very reasonable in the low- to mid-£140s,” said Mr Thorpe.

In Paris, the MATIF market has seen May futures climb to 206/t (143/t) despite traders” fears about the EU”s 1m tonne surplus, which is still 10-15/t too expensive to sell on the world market.

 “That surplus will be heavy on the market, but long-term, they are talking of tripling biodiesel production over the next four to five years.

 “I”m not sure the UK carry-out will be as large as forecast initially, and we are unlikely to see a repeat of the very good yields of last year.” Other factors to consider were the Argentinean soya harvest, American fears over the impact of Asian rust and the drought in Brazil, which moved the USDA to slash forecasts on the soya crop by 4m tonnes to about 55m tonnes, he added.