Frustrated oilseeds markets struggle to make gains
© Tim Scrivener A well-supplied global oilseeds market is limiting potential price gains, with a large availability of product from the Black Sea region and further pressure coming from soya bean harvests in North America.
Global oilseed prices are struggling to return to the highs seen in 2022, with both Chicago and Paris rapeseed futures remaining weak compared with historic levels.
Paris rapeseed futures opened at €440.75/t (£382.75/t) on 27 September for the November contract, down more than €150/t (£131/t) compared with this time last year, and a fall of €32/t (£27.79/t) on month-earlier levels.
See also: Oilseed markets push back towards £380/t
UK market
UK oilseeds markets are following wider global trends and remain bearish in the short term, despite an increase in crude oil prices and more favourable exchange rates. Ex-farm oilseed rape spot prices collected by Farmers Weekly averaged £354/t midweek.
United Oilseeds trading manager Owen Cligg said things were a bit frustrating in oilseed markets, with prices continuing to hover at about £350/t ex-farm.
“There was plenty of Black Sea rapeseed around that was hanging quite heavily on the market, and we’ve not really been able to get away from harvest values at the moment.”
The US soya bean harvest is under way and might well turn out to be not quite as good as expected, according to Mr Cligg, which could allow a bit of room for improvement.
“Soya beans have been quite volatile. They went up to US$14 [£11.53] a bushel, but are back down to $13 [£10.71] a bushel now,” he added.
Higher oil prices have been adding some support to markets, with Brent crude up by almost $10 (£8.24) a barrel during the past month due to Opec cutting production levels.
“Crude oil prices have been trading at more than $90 [£74.15] a barrel, so that, in theory, makes the biofuel market a bit more robust,” said Mr Cligg.
Traders also said a weaker exchange rate had been supporting UK prices, with the sterling-dollar rate at £1: $1.21 midweek and the sterling-euro rate at £1: €1.15.
Rapeseed outlook
Anthony Speight, AHDB senior analyst, said the rapeseed market was largely well supplied for the 2023-24 marketing year, despite recent cuts to Canadian and EU crops.
He said: “The USDA forecast global ending stocks at 6.1m tonnes, down from 7.5m tonnes last year, but way above 2021-22, when ending stocks dropped to 4.6m tonnes.
“Rapeseed futures appear to have hit a floor, after falling to meet soya bean futures. Global stocks for 2023-24 of rapeseed are not small enough to cause a huge premium to soya beans.
Therefore, this indicates that soya beans are probably going to drive domestic rapeseed prices for this marketing year.”
A large South American soya bean production could also weigh on the oilseed complex, according to Mr Speight, with warm and wet El Nino weather conditions likely to bolster production in the region through to next year.