July 3, 2013

 

UK rapeseed crop estimate to hit its lowest since 2004

 

 

With rapeseed prices slipping and a difficult combining season in prospect, UK's rapeseed growers face the lowest harvest in nearly a decade.

 

Harvest estimates revolve around a crop of 1.8 million tonnes, the lowest since 2004, while prices are down £30/tonne (US$45) in the last two months. Meanwhile, there is looming fear of crusher rejection due to green seed.

 

Some forecasts put the crop area down about 30% this season with lower yields due to variable crops and the big upswing in lower-yielding spring rapeseed.

 

Prospects of bigger oilseed crops around the world have put pressure on prices with the UK seen as the only major producing nation with lower harvest prospects.

 

New crop prices are quoted at around £315 to £320 (US$477-485) per tonne ex-farm for August, with few factors seen helping support rapeseed prices.

 

"The market will need a significant crop problem around the world to change sentiment, but we see £320/tonne (US$485) as still an excellent return for farmers," says Jonathan Lane, trading manager at Gleadell.

 

He adds that growers could still earn an extra £20-25 (US$30-38) per tonne oil bonus to bring prices to around the £345/tonne (US$523) levels which were quoted back in the spring.

 

Lane's estimate is for a British rapeseed harvest of 1.76 million tonnes, down from a 2012 crop of 2.6 million tonnes and a record harvest of 2.8 million tonnes in 2011.

 

The biggest corn/corn area in the US since 1936, together with a potentially larger soy crop and good rapeseed crops in Canada and Germany, have all put pressure on prices.

 

Owen Cligg, trading manager at United Oilseeds, estimates a national crop of 1.5 million to 2.0 million tonnes due to the fall in the crop's area and poor yields, and sees a likely crop of around 1.8 million tonnes.

 

"We are not looking at a very good crop, but prices have drifted down quicker than expected," he says.

 

Richard Elsdon, also based at United Oilseeds, warns that there is huge variability in crops within fields which could cause problems with seed quality at harvest.

 

Oilseed rape crushers look for yellow seeds, but in such a variable season, there is strong likelihood that some seed will be green and may suffer price deductions.

 

"There will be a lot more management time and effort expended to avoid any rejections from green seeds this season," says Elsdon, United Oilseed's technical manager.

 

He suggests that some growers may have to spray off rapeseed field in two stages due to the variable maturity of the crop. The ideal time to apply the main desiccation spray, glyphosate, is when two-thirds of the seeds in pods, on the main raceme, are changing from green to brown. There could still be some time off.

 

Elsdon says the most forward crops he has seen will probably need glyphosate spray at the end of July, meaning the earliest harvest could be mid-August.