Unpromising signals for oil market

By FWi staff

A LARGER US Department of Agriculture soyabean crop estimate than expected and sharply lower vegetable oil markets continued to dampen market prospects.

However, European market price falls were limited by the strong US Dollar, which saw the Pound weaken by a further 1.5% over the week, and by limited spot rapeseed supplies.

UK delivered values remained unchanged. The relatively firm European seed prices, when compared to oil, have further reduced an already weak crush margin.

UK oilseed crop update

Crop analysts report that the English spring rapeseed harvest is 98% finished.

Yields of 2.5t/ha were reported in better crops, while the majority of the harvested spring rapeseed is believed to have yielded lower at 2t/ha.

The latter would suggest an English spring rapeseed crop of 58,400 tonnes. Very early new crop projections forecast larger winter rapeseed plantings than last year.

The new crop has benefited from the recent rains and has just emerged.

USDA September crop report

Following recent dry weather spells in some US growing regions, the USDA decreased its estimate of this years US soyabean crop from 81.3m to 78.9m tonnes.

The 3% crop reduction remained below trade expectations.

However, a special survey on harvested area will be conducted in the coming weeks, which may result in a further crop adjustment of the October estimate.

Projections for other major soyabean producers/consumers remained unchanged, even for China, where recent unfavourable weather may have reduced yield potential.

The better than expected report, disappointing weekly export sales and harvest pressure (the first US soyabean fields have been cut), pushed prices $8/t lower.

Oil market takes a further plunge

Under the lead of the depressed Indonesian and Malaysian palm oil market (high stocks, low ex-ports), global vegetable oil prices fell sharply last week with palm and soya oil losing $10/t.

Sunflower oil continued to fall on high old-crop stocks in the main producer countries of Russia and the Ukraine.

The recent price falls have eroded the previous premia with the result that rape, sunflower and soya oil exports are all trading at around $350/t.

It remains to be seen if crushers will switch from rapeseed to other oilseeds.

• US$1 = 71.50p, 1 = US$1.3986 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