Poor economic outlook drags down oilseeds market
© Tim Scrivener Farmgate oilseed rape prices have almost halved since peaking at £876.9/t in April this year.
The average spot ex-farm price collected by Farmers Weekly stood at £467/t on Wednesday 7 December and has tracked below last year’s levels since September.
See also: UK OSR planted area increases by 7% but imports still needed
UK ex-farm prices for harvest 2023 were quoted at £470/t in North Yorkshire and £478/t in East Anglia on 7 December.
Delivered prices for August 2023 ranged from £465/t in Inverness to £490/t in Erith, Kent.
Global demand remains uncertain, especially in China, where Covid-19 restrictions are still in place.
However, some lockdown restrictions in China are being lifted, offering potential support to markets.
The outlook for oilseed rape remains bearish, with increased availability as a result of exports from the Black Sea region.
Falling crude oil prices are also putting pressure on oilseed markets.
Brent crude oil stood at US$78.85 (£65.19) a barrel on 7 December, down by $19 (£15.64) on month-earlier levels.
Grower-owned co-op and marketing specialist United Oilseeds said weakness in oil is largely understood to be an implication of a rising dollar.
Markets are also reportedly still reacting to the news of the G7’s price cap on Russian oil.
John Maund, commercial support at grain and feed trader Cefetra, said the main trend of the past few weeks had been bearish, and Paris futures had lost almost €100/t (£86/t) since the beginning of November.
May 2023 Paris rapeseed futures opened at €572/t (£494) on 7 December, down from week-earlier levels of €601/t (£519).
Mr Maund said: “In the past few days there have been some glimmers of hope. China is talking of easing its Covid-19 policies, which gives a general lift to all sorts of markets, with demand from China suddenly looking like a possibility.
“On the domestic front it is all very quiet. Trade is just about ticking over, farmers aren’t very active on loads coming out, and consumers don’t seem that bothered, either,” he said.
Crop conditions
Cefetra grain origination manager Simon Wilcox said: “Argentina remains dry, with extreme heat and no change expected in the next two weeks. Brazil is also still dry in the South, but otherwise has more normal temperatures. Europe remains a mixed bag, with rain and above-average temperatures.”
Canada has also faced dry conditions with Statistics Canada lowering its canola production estimates.
Domestic crop
The latest crop development report from the AHDB showed 77% of oilseed rape crops were rated good or excellent across Great Britain, with drilling completed by late September.
The report said the crop had generally established well, but prolonged dry conditions at the end of summer caused some areas to struggle.
Cabbage stem flea beetle has created issues in some parts and led to crops being replaced with alternatives.
Cargill’s Hull rapeseed crushing plant is due to close this month, which will take 200,000-250,000t of capacity out of the UK market.
However, with the UK remaining a net importer of oilseeds this year, the effect of the closure should be minimal.