Oilseed price returns to season high


By FW staff

OILSEED rape continued to make gains earlier this week with prices returning to season highs.


Typical values hit £120/t delivered, the equivalent of £111-112/t ex-farm in many areas, £3-4/t up on the week.


The main reason is a rise in vegetable oil prices in Chicago, boosted by a slower than expected soyabean crush and higher monthly palm oil exports, says Jenny Cameron of the Home-Grown Cereals Authority.


Soyabean futures prices rose the equivalent of £1.28/t in Chicago last week, while soya oil climbed £4.46/t.


However, demand from UK crushers has also helped, maintains Robert Kerr of Glencore Grain.


“Crushers have tended to sit back from the market. Given that the UK cut it biggest crop ever – about 1.7m tonnes last harvest – they have been waxing and waning all year. But more has probably been exported than they thought.”


A strong US dollar has also continued to help the competitiveness of EU supplies. Bangladesh and Pakistan are reported to have bought up to 250,000 tonne since January, helping to reduce stocks.


Although UK crushers have paid £120/t delivered on the spot market for German supplies, that has not capped forward prices, notes Mr Kerr. “You can get £123/t delivered for May.”


However, reports of improved US and South American crops may limit further gains, says Ms Cameron. Crushing margins are also under pressure, and there is plenty of oil in Europe.


With perhaps 15% of the UK rape crop still to sell, growers should not ignore the current highs, Mr Kerr advises.


New crop values have improved slightly on the rise, and are now similar to current levels for the Jan position. As available supplies are priced at £104-106/t, and the November slot is worth £109-111/t.


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