Oilseed prices have risen sharply in recent days, as weather concerns in the UK and elsewhere in the world drive bullish sentiment in a market that was already looking tightly supplied.
“It’s very firm,” John Thorpe, senior trader oilseed rape at Openfield Agriculture, told Agritrade News. “There is still demand for old crop rapeseed, but the new crop seems to have taken over.
“We have seen a £45/tonne increase in the beginning of April,” he explained. “It seems to be bouncing up five or six pounds a day. There is good demand, but we know that the plantings for harvest 2021 are down,” he added. “We know that in some parts of the country the crop is good but other parts it’s not so good.”
Pointing out that dry weather is one of the factors behind the strength of the market, Mr Thorpe commented: “You’ll find growers are probably nervous about selling, because it is still fairly early in the season. That has been feeding on itself, as there is high demand – people want to buy rapeseed but there are few sellers. There is clearly a tight S&D in the UK and in the European market.” Mr Thorpe also noted recent sales of two cargoes of rapeseed from the Ukraine to Canada, something which he says is unprecedented.
“It is very frustrating really,” he stated. “You have a market that is extremely volatile, but you can’t get involved.” Speaking on Tuesday April 20th, he put the rise in the MATIF market over two days at €46/tonne. “The May contract is coming off the board shortly, but it has seen a hell of a movement,” he said, describing the market as having “disconnected itself from the physical reality. As far as the new crop is concerned these are record highs,” he noted.
“There is real concern about the global supply of vegetable oil,” he continued. There were concerns, for example, about Argentina’s soyabean crop after wet weather there. “That hasn’t had a very good growing season,” he said. The US had had weather problems. “Then you have to factor in frost in France and all of a sudden we’ve now got very dry weather in the UK. And don’t forget we had frost last week and the week before when some of the rape was coming into flower.
“It is going to be a very difficult market next year,” Mr Thorpe concluded. “It will be starting at very high levels.”
AHDB explained in a market report last week that “cold weather across the US Midwest and plains contributed to rising prices,” adding that “cold temperatures are forecast to continue to the end of the month across key soyabean producing areas.” The Board noted the slow progress of Argentina’s harvest.
It also reported that the German cooperative association DRV has forecast a rise of 1.6% to 3.57 million tonnes in the country’s rapeseed crop. AHDB noted that “recent cold weather has slowed growth, though yield potential looks strong,” adding that “EU supply and demand is still expected to be tight heading into next season, with the French crop forecast to be smaller year-on-year.”