Weaker Pound boosts home-grown rapeseed

By FWi staff

FOLLOWING a settled week on the UK market, rape values attempted a strong recovery during trading on Friday.

Prices rose up by £4.50/t in some regions and rapeseed for October delivery to main crush centres traded at £159/t. A weaker Pound was cited as the main reason, making imported rapeseed less competitive to domestic supplies, said the Home-Grown Cereals Authority.

This currency-led rise in seed prices also pushed meal and oil prices higher, resulting in an improvement in the crushers margin. However, these continue to remain well below the high levels seen in 1997.

A lack of rape movement off farms has been noted by traders since harvest, but recent estimates indicate that as much as 50% of the crop is still to be marketed.

Despite the rebound in rapeseed values, nearby prices dont seem to be high enough to tempt farmers into the market. Neither, it appears has the threat that consumers may import competitively priced rapeseed from the southern hemisphere.

With the monthly carry at only £1.50/t between October and December positions, and a similar differential between January and March, there is currently little impetus for farmers to sell on the forward market, said the HGCA.

The latest USDA production estimates were released on Friday indicating a 5% reduction in the expected US soyabean crop. The USDA now estimates total soyabean production in the US will be 75.35 m tonnes. This compares with their last estimate in September of just over 79 m tonnes.

This news suggests that overall supply and demand for vegetable oil may become tighter than originally expected, said Ian Wallis of Cargill Plc. “This should help to provide better support for oilseed values.”