OSR values push higher on late harvest and crop worries

Oilseed rape prices are close to contract highs again as crude oil values rise and the market is nervous in anticipation of potential Canadian crop losses.

Ex-farm values midweek were up almost £12/t on the week, at £455/t for August in many counties. The average of £449/t was dragged down by the ex-farm value of £430/t in north-east Scotland which, because of the location, is always considerably lower priced than other areas.

AHDB Cereals and Oilseeds reported that UK delivered OSR prices to ADM’s Erith, Kent, crushing plant were quoted at £458.50/t last Friday (6 August).

See also: What’s the market like for farms with natural capital?

This is the highest price in August since the AHDB’s delivered oilseeds survey began in 2005, and £130.90/t higher than the five-year average.

The late start to harvest and subsequent poor harvesting conditions in Europe and the Black Sea region are important factors. EU oilseed rape imports in July usually come from Ukraine, but have been delayed and replaced to some extent by Australian OSR.

In addition, the extent of the losses in the Canadian crop as a result of the heat dome that has been overhanging key crop areas recently is not yet clear.

AHDB senior analyst Alice Jones said: “Short term, until Ukraine’s exports return to normal levels and Canadian crop losses are quantified, prices will likely remain supported.

“But the supply pressure could ease as harvest pace picks up in Ukraine. After that, attention will turn to the Australian new-crop picture.”

As well as the tight early season supply, currency and crush margins are important factors, and traders warn that while prices are high, they are also likely to be volatile, so recommend making at least a proportion of sales at current levels.