December 9, 2010


UK rapeseed prices soar in bullish market



UK rapeseed prices have soared over the past week, due to tight domestic supplies and concerns over the South American soy crop.


Paris rapeseed futures rose by EUR20/tonne (US$26.53/tonne) in the week on Tuesday (Dec 7), to EUR455.50/tonne (US$604.29/tonne). Despite easing slightly as Farmers Weekly went to press on Wednesday, UK ex-farm values were GBP14/tonne (US$22.10) stronger on the week, at about GBP370/tonne (US$584) for spot movement.


"It's been another incredible week in the oilseeds complex," said Jonathan Lane, Gleadell Agriculture's trading manager. "Prices continue to climb as one piece of bullish news after another, combined with the increasing influences of non-agricultural investors, pushes prices higher."


Changes to China's economic policy had been expected to curb demand for soy imports - but it was continuing to buy heavily, underpinning the market. "There is now an added worry that increasingly dry weather conditions in South America are eating into the yield potential of their soy crops - and the world desperately needs Brazil and Argentina to have a good harvest," Lane said.


Crushers were becoming concerned about tight European rapeseed supplies, pulling exports out of the UK, he added. "Crush margins are still good, but the current rate of use simply can't be maintained. We need rapeseed prices to go higher to ration demand."

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