Banks action pushes oilseed prices down

By FWi staff

FOLLOWING the intervention of major central banks to support the Euro, its value against the US Dollar improved to 88US¢ on Friday, compared to 84¢ prior to intervention.

Sterling strengthened by 6US¢ to $1.46. EU rapeseed prices saw an immediate price adjustment, with MATIF futures losing 2/t and UK values falling by between 3-4/t for spot delivery.

Trading activity was again limited as sellers and buyers price expectations remain apart.

Oil market remains bearish

Malaysian palm oil futures fell a further $13/t last week, reaching the lowest price level in 6 years.

This has exacerbated price pressure on other vegetable oils which are also under pressure from high stocks and slow exports.

The bearish oil markets also make seed price rises in the short-term doubtful.

In contrast, meal prices have remained firm, following stronger US soyameal prices.

Chicago soyameal futures rose $9/t on a tight cash supply situation.

International market prices and commentary

• US soyabean harvest

  With the US soyabean harvest now happening in earnest, speculation about the size and quality of the crop will dominate Chicago soya futures during the coming weeks.

  Early reports indicated some concern about freezing temperatures, disease occurrence, and lower than expected yields.

  This is strengthening expectations that the soyabean crop estimate may be adjusted lower in the October USDA report.

  The lower anticipated crop and ongoing demand for US soyabeans from China continue to help soyabean fundamentals as did the weaker US Dollar against the Euro.

  Chicago soyabean futures ended the week $5/t higher.

• China closer to becoming a WTO member

  The US senate has approved a bill granting China Permanent Normal Trade Relations (PNTR).

  This gives Chinese goods the same access to US markets as products from other nations, which is essential for China joining the WTO.

  On becoming a member, China will grant increased access to its agricultural markets.

  Economic and population growth will lead to a rising meat consumption.

  This should thus ensure Chinese export demand for vegetable oil, oilseeds and meal in the years to come.

• US$1 = 68.73p, 1 = US$1.4549 at time of writing.
• 4th Annual Crops Marketing Conference, 04 October, 2000

Taken from HGCA weekly MI Bulletin To contact the HGCA phone 020 7520 3972 Click here to visit the Home-Grown Cereals Authority