Risky business holding out for even better rape prices
By Tamarind Davidson
OILSEED rape and pulse prices gained support from this weeks ban on the use of bonemeal in animal feed across the EU.
But, while recent gains may have tempted some farmers holding rapeseed to sell, many more are holding out for further rises, traders suggest.
Growers should take advantage of current values, says Glencores Robert Kerr. "Longer term, rape is worth less on new crop."
Since early November the delivered rape price has risen about £10 to £139/t, but further significant increases are difficult to quantify.
"There is not much downside to the market at the moment, with the MBM ban helping to support prices," says Banks Agricultures John Martin.
"But this should be viewed with a note of caution. Consumption remains uncertain as we could be looking at a smaller herd size or more of a consumer preference for white meat, and this will mean less demand for rapemeal. And there are other factors to consider such as currency and the Australian crop now becoming available." And oil, rather than meal, provides most of the crushers margin and the market is trading down this week, he adds.
Pea and bean values have risen £3-£4/t over the past week, to average about £85/t, and may gain as much again through to the end of this year, before levelling off, says Alan Wymer of Saxon Agriculture.
"But it is not a big time for farmer selling, and we do not really know how much is out there. Better prices have prompted a few to sell, but if compounders cant get enough they may look elsewhere." Soya and French or Canadian peas could all cap the rise, says Mr Wymer.
Wheat prices are also up, with feed grain worth about £63/t ex farm, a gain of about £5 on the month. Bread wheat is worth £10-£13/t more.
"Despite IACS payments coming in many growers have been happy to take advantage of the price rather than risk hanging on," says Banks Richard Whitlock.
Next season looks brighter. Wheat futures in the pre-Christmas 2001 slot rose £2.95 on the week, due to continuing weather problems in the UK and parts of northern Europe, says the Home-Grown Cereals Authority. That equates to an ex-farm price of over £70/t.
David Balderson of Viking Cereals believes that farmers should keep grain locked up. "I am amazed no one is embracing how serious the potential shortage really is. Next season we will almost certainly have no exportable surplus and could be even looking at a deficit. £70/t does look tempting, but farmers should not be persuaded to sell at the moment." *