US drought sends rape prices up – HGCA
EX-FARM oilseed rape prices are about 2/t higher than last week, mainly due to drought concerns over the US soya bean crop.
Hot, dry weather in the US Delta and parts of the Midwest raised yield concerns. Production is expected top fall below the USDAs August estimate of 81.3m tonnes.
Bean oil futures for November rose to 16.58 cents/lb, 6% higher than recent lows.
Further strengthening of the US$ against the also helped, pushing European rapeseed prices higher.
UK delivered values now stand at about 132/t for September (Erith and Liverpool), rising to 135/t for November.
However, Rotterdam quoted stocks of rape oils stand at 107,000t, over 50% higher than a year ago, and sunflower oil is now cheaper.
Unless there is a significant offtake of vegetable oils, we are looking at a capped market, says James Read of Glencore Grain.
But we are looking at afar lower UK rape crop this year, and prices are about 15/t higher than this time last year.
1 = 61p, 1 = 1.63407 at time of writing.
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Taken from HGCA weekly MI Bulletin
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